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What do I do if my creditor refuses my offer?

On occasion you will find creditors that simply do not wish to work with you when you develop a debt management plan to pay off your debts. When this happens, it leaves you in a frustrating position that forces you to start back from square one. Sometimes you get a mixed reception from your creditors when you offer a payment arrangement, with some creditors accepting your offer and others saying no. When this happens, you have every right to ask them to reconsider.

When your creditors refuse to accept your payment,
write them a letter that explains the circumstances behind your payment offer and include a personal budget sheet with the letter. Go ahead and start making the offered reduced payments on a regular basis as a show of good faith and point that out to the creditors. Additionally, if you have other creditors that have already accepted your repayment offer, tell the creditor that refused that they have accepted your offer and sent copies of their acceptance letters to them as proof. Finally, point out to them that you cannot increase your offer of payment to them without upsetting the other arrangements you have made and that you are trying to treat all of your creditors fairly.

Creditors will also refuse to freeze the interest accruing on the account even though they have accepted your repayment offer or they only reduce the interest they are charging. Once again, you have the right to ask them to reconsider via letter. You may wish to point out to the creditor that is being difficult that if you go to court to solve your debt through an IVA or even bankruptcy, the interest would be frozen by the courts. Additionally, if they are charging you interest that is more than what your payment actually is then the debt you owe them will simply continue to increase, that you will never be able to pay off the debt and that there is less of an incentive for you to completely pay off your debt.

  • If your creditor still refuses to accept your reduced payments or freeze your interest you have to make a decision about how you want to handle this. You could continue to make the reduced payments that you offered the creditor and see if they decide to take you to court over it. Or you can send them another letter stating that if they refuse to freeze the interest then you are going to stop making the payments because it is not improving the debt situation. Be prepared to go to county court if you decide on this course of action, but if you are trying to do everything you can given your financial situation, you should be treated fairly by your creditors, something the courts are likely to expect.

    If the creditor threatens to take you to court even after you have made numerous attempts to get them to agree to your payments and freeze interest, or if they have accepted your terms but threaten to take you anyway, you can contact them via letter again pointing out to them that the courts will expect both parties to ‘act reasonably’ to resolve the situation, that the courts may find their refusal unreasonable, and that you intend to petition the court to look at the argument between you. Sometimes this is what it takes to get the creditor to finally agree with your terms.
Stick to your guns and do not give up if the creditors refuse your offer. Do not let them persuade you to pay more than you can afford and let your other bills fall behind. That could cause even more financial problems for you that you do not need.
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