Top 10 Tips

Communication

Communication is the key to successful negotiations with creditors. Do not ignore their letters. Answer them promptly by letter or by telephone. If you promise to contact someone by a certain date, make sure you keep your promise and contact them even if only to tell them when you are going to make a payment to them or advise why there is a delay.

Mind Your Manners

It never pays to get angry with anyone, even when you feel justified in doing so. Always be polite and courteous even in the face of being treated rudely. It takes the wind out of their sails. If someone is acting negatively with you and you react negatively, it always makes the situation worse. As a debtor your objective is to persuade someone to be sympathetic to your circumstances.

Don't Take Any Nonsense

Don't take any nonsense from anyone. 100 years ago we used to have debtors prisons in the UK. If this was the case now we would not have enough prisons to house even a small proportion of debtors. The worst that can happen is that a creditor will obtain a judgment against you and take money from you on an involuntary basis, which you can avoid through several ways explained in this website. If you are being harassed by a creditor or a company employed by a creditor take the name of the individual and report them.

Get It In Writing

Get it in writing. Always create a paper trail. This starts with your records such as invoices, credit card statements etc. Every telephone call, letter written/received and offers made. Always make a note of the date and time and to whom you have spoken and if necessary confirm all conversations or offers in writing.

Don't Bluff

If you make an offer, make sure that you can do what you have promised. Don't tell creditors what you think they want to hear. Tell them what you really can do making sure you follow through.

Don't Threaten Creditors With Bankruptcy

Most creditors and their agents hear these types of threats every day. It is a form of stonewalling that hinders negotiations. Creditors are likely to become more aggressive and their standard reply is "go ahead and file". There is a way to do this indirectly in the context of portraying adverse financial circumstances, with an inference that bankruptcy is a possible alternative in the event that the creditor does not accept your offer.

Make your offer as brief and precise as possible

Explain the reasons for your current financial difficulties and then come to the point and make the offer. Make the terms of the offer precise. Do not leave things open ended such as "things should pick up during Christmas and I will increase my payments if I can".

If You Get into Trouble

If you get into trouble after you have negotiated an offer and you can't adhere to the arrangement, contact the creditor in advance. Attempt to send a portion of the funds you promised with a proposal to make up the balance, or renegotiate the entire proposal. Do not wait to contact the creditor until after you have missed a deadline for payment.

Protect Yourself

If you receive Court or official papers, protect yourself. Make sure you know how much time you have until a legal response is required to be filed with the Court. This is usually set out on the Court or official papers. Consult with either a Citizens Advice Bureau or similar organisation or insolvency practitioner/solicitor regarding your rights or the means to resolve the claim without going to Court. If you contact the creditors or their agent and start negotiating the claim, make sure the response deadline is postponed to a date that you can keep to. This postponement must then be confirmed in writing.

Be Realistic

Always be realistic with your offer. Only offer what you can actually afford. Ensure you complete your statement of means as accurately as possible, not forgetting expenses such as school expenses, child minding, cigarettes, TV licence etc. Do not however insult your creditor by over estimating your expenses, such as entertainment, dining out etc. The majority of creditors are fair and they will expect realistic payments within your budget.