Letter Templates Re Debt (offer to pay / freeze interest etc)

Updates will be added to this thread, as and when available.


DEBT LETTER TEMPLATES

Here is a selection of templates which will be useful when dealing with creditors.

The letters are listed in number order, they are in no particular order, and are in no way intended as a step-by-step guide - you will need to use the letter appropriate to your needs and edit it where indicated in red.

The letters are as follows:
# 1 - Use this to ask your creditors to hold further action on your account
# 2 - Use this to ask your creditors to accept pro rata offers of payment on your debts
# 3 - Use this to ask your creditors to accept a token payment or no payment on your debts
# 4 - When a creditor refuses your offer of payment, use this to ask them to reconsider
# 5 - When a creditor refuses to freeze interest on your account, use this ask them to reconsider
# 6 - When a creditor has turned down an offer of payment, interest is still being added, and you want the creditor to take you to court.
# 7 - When creditors have turned down an offer of payment, interest is still being added but you don’t want to go to court
# 8 - When a creditor asks you to agree to a voluntary charge against your home
# 9 - Request for a stay of execution in the High Court
# 10 - Use this when you want to pay a full and final settlement for any debt
# 11 - Use this when you want to ask creditors to write off the debt due to your circumstances
# 12 - Use this when you want to ask your creditors to reconsider if they refuse to write off the debt
# 13 - Dispute your liability for a debt where a creditor has not contacted you for over six years
# 14 - Ask your creditor for a copy of your credit agreement under the Consumer Credit Act 1974
# 15 - Mortgage shortfalls: Breakdown of balance owed
# 16 - Mortgage shortfalls: Please write off the debt
# 17 - Mortgage shortfalls: Full and final settlement letter
# 18 - Mortgage shortfalls: Lender should not pursue under CML policy
# 19 - Inform your creditor that you are terminating your hire purchase/conditional sale agreement
# 20 - Letter to Recall a Debt from a DCA (Account in Dispute)




Some of these letters refer to a budget planner. Here is a simple budget planner which you can fill in to work out how much you can afford to offer your creditors, and you can print this and send with the relevant letter: Click Here for the spreadsheet

[Sapphire]

LETTER # 1

Ask your creditors to hold action on your account.

Your Address
Date

Company Name
Address


Dear Sir/Madam

Re:− Your Reference

We are writing to inform you that we are seeking advice and assistance regarding our current financial difficulties.

To this end, we would appreciate if you could hold any action on the above account for a period of at least 28 days.

Also, during this period, could you please freeze interest and/or any other charges accruing on the above account.

We look forward to hearing from you as soon as possible.

Yours faithfully


Your name

[Sapphire]

LETTER # 2

Ask your creditors to accept pro rata offers of payment on your debts

Your address
Date

Company Name
Address

Dear Sir/Madam,

Re: Your Reference

Since making that above agreement with you, our circumstances have changed.

We cannot now afford to agreed monthly payments because ... [add your explantation here, keep it brief and in one paragraph if possible.

We enclose a Personal Budget sheet which shows our total income from all sources, and our outgoings. As you can see we have only £??? per month left for our creditors. The offers we have made to our creditors have worked out on a pro−rata basis, and we have written to all our creditors asking them to accept reduced payments.

In view of our circumstances, please would you agree to accept a reduced offer of £??? per month. If interest or other charges are being added to the account we would be grateful if you would freeze these so that all payments made will reduce what I owe you.

Should our circumstances improve we will contact you again.

We would be grateful if you would send a paying−in book to make it easier to pay you. Thank you for your assistance. We look forward to hearing from you as soon as possible.

Yours faithfully

Your Name

[Sapphire]

LETTER # 3

Ask your creditors to accept a token payment or no payment on your debts

Your Address
Date

Company Name
Address

Dear Sir/Madam

Re: Your Reference

Since making that above agreement with you, our circumstances have changed.

We cannot now afford to agreed monthly payments because ... [add your explanation here, keep it brief and in one paragraph if possible).

We enclose a Personal Budget sheet which shows our total income from all sources, and the total outgoings of our household. As you can see we have no money left to make offers of payment to my creditors.

In view of our circumstances, would you please accept no payment at present to be reviewed in six months. If interest or other charges are being added to the account, we would be grateful if you would freeze these so our debt does not increase.

Should my circumstances improve we will contact you again.

Thank you for your assistance. We look forward to hearing from you as soon as possible.

Yours faithfully

Your Name

[Sapphire]

LETTER # 4

When a creditor refuses your offer of payment

Your Address
Date

Company Name
Address

Dear Sir/Madam

Ref: Your Reference

Thank you for your letter of date of their letter concerning the above account.

We are are sorry that you feel unable to accept the offer which we have made. The majority of our other creditors have accepted the offers made to them and we have commenced payments.

We cannot offer you more because we can only afford £ ??? per month between all our other creditors, and it would be wrong to cease or reduce payments to our other creditors in favour of your company. The offer made to you is on a pro rata basis, as used by the county court.

In the light of the other creditors agreeing to our repayment plan, please would you reconsider our offer. We will be making the payments in line with the offer to your company, on a weekly basis, as a gesture of goodwill.

We look forward to hearing from you as soon as possible.

Yours faithfully

Your Name

[Sapphire]

LETTER # 5

When a creditor refuses to freeze interest on your account

Your Address
Date

Company Name
Address

Dear Sir/Madam

Ref: Your Reference

Thank you for your letter of date of their letter concerning the above account. We are sorry that you feel unable to suspend interest charges on the above account.

The majority of our other creditors have agreed to the offer of payment and agreed to suspend any interest charges still accruing. They have accepted that to continue to charge interest would not assist us in our present financial difficulties, and can only serve to increase our total debt.

As you are aware, we have already paid considerable sums in interest to our account. If interest charges continue, the monthly installments we are paying will not even cover that interest. Also the co−operation of our other creditors who have agreed to freeze interest already would be put at risk.

We would therefore be grateful if you would reconsider your decision not to freeze the interest. This would mean that the monthly payments we make would actually reduce the balance outstanding to your company.

We look forward to hearing from you as soon as possible.

Yours faithfully

Your Name

[Sapphire]

LETTER # 6

When a creditor has turned down an offer of payment, interest is still being added, and you want the creditor to take you to court.

Your Address

Date

Company Name
Address


Dear Sir/Madam

Ref: Your Reference

Thank you for your letter of date of their letter. We are very disappointed that we seem unable to reach a satisfactory compromise in this case.

As we have already explained, we can only afford £ ??? per month at the present time, and we feel that it is pointless paying this amount to you only to see the debt increase. We invite you therefore to sue us for the debt, when we shall have the opportunity of offering £ ??? per month through the courts. In addition, once judgment is granted we understand that further interest will be suspended in any event.

It seems that we can only achieve a reasonable outcome to this matter by allowing the courts to decide, although this will involve us both in extra expense and time wasted with court proceedings.

The offer of £ ??? per month plus suspension of interest is of course still open to you to accept.

Yours faithfully

Your Name

[Sapphire]

LETTER # 7

When creditors have turned down an offer of payment, interest is still being added but you don’t want to go to court

Your Address

Date

Company Name
Address

Dear Sir/Madam

Ref: Your Reference

Thank you for your letter of date of their letter. We are very disappointed that we seem unable to reach a satisfactory compromise in this case.

As we have already explained, we can only afford £ ??? per month at the present time. This is the only realistic payment proposal bearing in mind the enclosed personal budget sheet.

You have stated in correspondence your intention to commence proceedings in the county court against us. The commencement of legal proceedings under such circumstances could be counter to the ‘Overriding Objectives’ of the new Civil Procedure Rules. You will be aware that the Overriding Objectives underpin everything the court does. Moreover, paragraph 4 of the Protocols Practice Direction states that in cases not covered by an approved pre−action protocol, the court will expect the parties “to act reasonably…….. In trying to avoid the necessity for the start of proceedings”.

We would suggest that your refusal to accept our offer could be viewed as unreasonable and we would ask the court to consider this matter with reference to the Overriding Objectives.

The offer of £??? is of course still open to you to accept.

Yours faithfully

Your Name

[Sapphire]

LETTER # 8

When a creditor asks you to agree to a voluntary charge against your home

Your Address

Date

Company Name
Address

Dear Sir/Madam

Ref: Your Reference

Further to our meeting of date, we are writing to confirm that we are not prepared to agree to a voluntary charge on our property as requested by you, in respect of the debt to your company.

As already discussed with you, we have a number of creditors, apart from yourselves. To allow you to obtain a charge on our property would be to grant your company preferential status, and could therefore prejudice the rights of our other creditors, all of whom have already accepted our proposals without any request for additional security.

In addition, whilst it is not our intention in any way to be unco−operative, we are not prepared to allow a debt which is currently unsecured to become a secured debt and therefore put our home at risk.

As you will see from the Personal Budget which we have already submitted an offer to your company is still open for you to accept. This is based on our income and expenditure, and a pro rata of equitable distribution of available income. We would therefore hope that you will follow the lead taken by the other creditors, and accept our proposals without attaching unnecessary conditions.

Furthermore, whilst of course we wish to avoid county court action, we are aware that were your company to pursue this debt through the county court, the court would look at our circumstances and order a level payment which we could afford, and in addition would freeze interest on the account.

We would bring to your attention that following the case of Mercantile Credit Ltd−v−Ellis and others in the Court of Appeal on March 11th 1987, if we were to maintain payments as ordered by the court, your company would be unable to obtain a Charging Order against us. This is further reason why we do not wish to allow a charge on our home.

In light of the other creditors agreeing to our repayment plan, please would you reconsider our offer. We will be making the payments in line with the offer to our company, on a monthly basis, as a gesture of goodwill.

May we take this opportunity of expressing our sincere hope that we can come to a mutually acceptable arrangement, that will allow repayment to our creditors at a level which is affordable based on our circumstances.

We look forward to your co−operation in this matter

Yours faithfully

Your Name

[Sapphire]

LETTER # 9

Request for a stay of execution in the High Court

Your Name & Address
Date


Company Name
Address

Dear Sir/Madam

Case No: Your Case No.

We are unable to pay the sum claimed immediately and wish to apply for a stay of execution.

We therefore enclose an application and affidavit/witness statement in support of our application for a stay.

You will note that we are able to make a repayment proposal of £ per month and that our first monthly instalment could be made date

We have examined our full financial circumstances and believe that this sum represents a realistic amount. We hope therefore that you will be able to accept the repayment schedule.

Yours faithfully

Your Name

[Sapphire]

LETTER # 10

Full and final settlement for any debt

Your Name & Address
Date

Company Name
Address

Dear Sir/Madam

Re: Your Reference

We write with reference to the money which you are claming on the above account.

We can confirm that we are unable to offer to pay the money which we owe in full. However, I can raise £ ??? and I want to offer this as an ex−gratia payment in full and final settlement of the account. This offer is made on the clear understanding that, if accepted, neither you nor any associate company will take any other action to enforce or pursue this debt in any way whatsoever and that we will be released for any liability.

We also request that, if accepted, you will make an entry on a credit reference agency file relating to the above account as "satisfied" in full.

Payment can be made within 2 weeks of receiving your written agreement of this offer and method of payment.

We look forward to receiving your reply.

Yours faithfully

Your Name

[Sapphire]

LETTER # 11

Ask creditors to write off the debt due to your circumstances

Your Address
Date

Company Name
Address


Dear Sir/Madam

Ref: Your Reference

Further to our recent letter, we enclose a copy of our Personal Budget sheet which gives details of our present financial circumstances.

As you can see our outgoings are more than our income and we are experiencing extreme financial hardship. We would be very grateful if you would consider writing off the outstanding debt owing. We have always taken very seriously our financial responsibilities but unfortunately our circumstances are so bad that we cannot realistically maintain payments of any kind.

Please take the following special information into account when making your decision.
Paragraph outlining the special circumstances you have that you want the creditor to take into account.

As you can see our situation is very unlikely to improve in the future, and our continued high debt level may have a serious effect on our physical and mental wellbeing. We would therefore be grateful if you would seriously consider our request for the debt to be written off.

We would appreciate any help you can give us.

Yours faithfully

Your Name

[Sapphire]

LETTER # 12

Ask your creditors to reconsider if they refuse to write off the debt

Your Address

Date

Company Name
Address


Dear Sir/Madam

Ref: Your Reference.

Thank you for your letter, concerning the above account. We are sorry that you are unable to write off the outstanding debt.

The majority of our creditors have agreed to the request that the debt be written off. They have accepted that our circumstances are such that we cannot realistically maintain payments of any kind.

We would therefore be grateful if you would reconsider your decision not to write off this debt. Please take the following information into account when making your decision.
Paragraph outlining the special circumstances you have that you want the creditor to take into account.

We would therefore be grateful if you would give careful reconsideration of your decision not to write off this debt. Should you not feel able to agree to this request, please consider accepting token payments on this account of £1 per month. As you will see from the enclosed personal budget sheet we have no available income and are not in a position to make realistic offers of payment. Additionally we would also ask that any interest and charges on the account be frozen to avoid the situation worsening.

Yours faithfully

Your Name

[Sapphire]

LETTER # 13

Dispute your liability for a debt where a creditor has not contacted you for over six years

Your Address

Date

Company Name
Address


Dear Sir/Madam

Ref: Your Reference

You have contacted us regarding the account with the above reference number, which you claim is owed by ourselves.

We would point out that under the Limitation Act 1980 Section 5 “an action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

We would also point out that the OFT say under their Debt Collection Guidance on statute barred debt that “it is unfair to pursue the debt if the debtor has heard nothing from the creditor during the relevant limitation period”.

The last payment of this alleged debt was made over six years ago and no further acknowledgement or payment has been made since that time. Unless you can provide evidence of payment or written contact from us in the relevant period under Section 5 of the Limitation Act, we suggest that you are no longer able to take any court action against us to recover the alleged amount claimed.

The OFT Debt Collection Guidance states further that “continuing to press for payment after a debtor has stated that they will not be paying a debt because it is statute barred could amount to harassment contrary to section 40 (1) of the Administration of Justice Act 1970”.

We await your written confirmation that this matter is now closed and that no further contact will be made concerning the above account after that last letter.

We look forward to your reply.

Yours faithfully

Your Name

[Sapphire]

LETTER # 14

Ask your creditor for a copy of your credit agreement under the Consumer Credit Act 1974

Your Address

Date

Company Name
Address
Dear Sir/Madam

Ref:− Your Reference

With reference to the above agreement, we would be grateful if you would send us a copy of this credit agreement.

We understand that under the Consumer Credit Act 1974 (Sections 77−79), we are entitled to receive a copy of our credit agreement on request. We enclose a payment of £1.00 which represents the fee payable under the Consumer Credit Act.

We understand a copy of our credit agreement should be supplied within 12 working days.

We understand that under the Consumer Credit Act creditors are unable to enforce an agreement if they fail to comply with a request for a copy of the agreement under these sections of the Act.

We look forward to hearing from you.

Yours faithfully

Your Name