Template Offer Letters
Here are some template letters which you can use to write to your lenders to agree a repayment plan.
You may want to complete a table of your incoming and outgoing money before you make any offer to your creditors. This will help you work out what you can afford. It may also be a good idea to send the completed income and expenditure to your creditor in support of your offer.
THESE TEMPLATES ARE INTENDED TO GUIDE YOU ONLY. PLEASE MAKE SURE THAT YOU READ THEM THROUGH CAREFULLY BEFORE COMPLETING ALL OF THE RELEVANT DETAILS.
You should send the letters to the correspondence address which appears on the website for your creditor, not to their registered address. Where there is any email address advertised on their website, you may also want to send a copy via email.
We normally expect creditors to respond within 2 to 6 weeks. If you have not had any reply in this time, you may want to follow up the letter with a call, email or another letter.
1.Letter asking for breathing space.
Use this template to write to your creditors if you cannot afford to make a payment. You can also use this if you need sometime to decide on an affordable payment plan to pay back your debt.
This letter asks your creditors to put your account on hold while you think about your financial situation and what you can afford to pay.
2. Letter offering lump sum settlement.
Use this template to make a reduced lump sum offer in full and final settlement of any outstanding balance. You may want to include an income or expenditure sheet or monthly budget with this letter to demonstrate what monthly payments you will be able to make if they do not accept your letter.Your lender may need to contact you to make sure that this payment is affordable to you and will not put you in financial difficulty. You may also be asked to confirm where the money is coming from. Don’t worry, these are perfectly normal questions to be asked.
It is a good idea to make the best offer you can afford, or are willing to make, at this stage. Any to-and-fro negotiating will likely only weaken your position and make the lender less likely to accept your offer.
3. Letter offering reduced settlement in instalments.
Use this template to make a reduced settlement offer which you will in instalments pay over a short period. In our experience, the shorter that period, the more likely it is that your offer will be accepted. We would not recommend you make the offer over anything more than 12 months, and only more than 6 months if absolutely necessary.
Again, you may want to include a monthly budget in support of your offer.
4. Letter offering a low ‘token’ payment.
Use this template to make a very small monthly ‘token’ offer. Only use this if you cannot afford to make larger payments at this stage.
A token payment will show your lender that you are committed to paying them as soon as you are able. This will also make sure that the limitation period does not start running and the creditor will be confident that you are not simply trying to make the debt statute barred by not paying.
Making a token offer should also stop any correspondence from your lender. Make sure you maintain the payment that you agree.
5. Letter offering reduced monthly payment.
Make sure you support this letter with an accurate report detailing your income and expenditure, or monthly budget.
Use this letter to set up a reduced monthly payment. You could complete an income and expenditure report and then split your available income between several creditors. This letter can be used to write to each lender making an offer. Make sure you keep a record of which offers have been accepted and set up the payments to go on the same date each month.
