Feb 14

How to deal with creditors

Reading Time: 6 minutes

When you’re in debt, it can be tough to deal with creditors threatening to bankrupt you or send the bailiffs round can be frightening.

A lot of people turn to debt management companies just to ‘make the hassling men go away’. But why pay money to do something that you can do for free?

Here’s the easy guide to getting them off your back and where you can go to get FREE professional help with it.



How to deal with creditors step by step

Step 1: Prioritise

Some debts are more important than others. The bills you MUST pay each month are:

  • mortgage or rent
  • Council Tax
  • utilities (gas, electricity)

There are other bills you need to pay as well. See this article for the full list of bills you must pay as well as the ones above.

Couple doing finances at the kitchen table

Pay these first, even if you have to make different payment arrangements with the companies.

You can pay other debts later on.

The credit card companies will hassle you and send you nasty, threatening letters but they have relatively little power. They bank on the fact that most people don’t know this and will cave in to pressure.

However, if you don’t pay your Council Tax, the council could make you bankrupt.

Mind you, do find out if you could get Council Tax benefit. If you are on a very low income, whether you work or not, you might be eligible. There are details on how to find out if you could get Council Tax benefit on the Directgov website. You can also find out about benefits and tax credits that you could be entitled to at Turn2us and Entitledto.


  1. If you can afford it, make sure that your mortgage/rent, Council Tax, electricity and gas bills are paid.
  2. If you are struggling with these, see if you can get them reduced – i.e. get Council tax benefit, speak to your mortgage company to restructure your debt so that you pay less each month, switch your gas and electricity to a cheaper version or, if you can’t do that, speak to your providers and see if they can help in any way.
  3. If you have money left over, that can go into paying your other debts.


Step 2: Communicate

Don’t ignore creditors.

It may be horrible, even terrifying, but the least painful and cheapest way to deal with them is to keep communicating.

Think about it – if you lent money to someone and suddenly they stopped paying you back, didn’t return your phone calls, ignored texts, emails and letters and generally went completely silent, wouldn’t you worry? You would probably be even more persistent in trying to get hold of them.

Older couple taking advice on their finances

That’s what it’s like for the banks and credit card companies. If you don’t pay and you don’t communicate, they worry.


  • Contact your creditors before they contact you.
  • Write to them or phone them explaining your situation and showing what you are doing to pay off your various debts.
  • Be polite and respectful and keep them abreast of your situation and everything you are doing to pay the money back.
  • If you phone, make sure you follow it up with an email or letter detailing the points you covered in your phone conversation.


Learn their language.

As in so many areas of business, if you know how the other side are thinking, and the words that press their buttons, you will get on much better.

If you want help with this, contact one of the free debt advice agencies (see below) and ask them to help. They know exactly how to speak to creditors and they will either help you do it or do it for you.

As long as you show that you’re honestly trying to sort things out as best you can, many creditors will accept an offer of much smaller payments and may even suspend the interest charges.

In other words, you can do your own personal arrangement with your credit card companies and banks. It’s the sort of thing that debt advice companies say they will do for you for a fee, but actually you can do it yourself or get one of the charities below to help you with it.

Subscribe to our free debt action plan emails for more advice and sample letters to creditors.


Step 3: Beat creditors’ tactics.

Credit card companies, banks and loan companies can do very little to harm you. What they’re good at is making your life miserable by threatening you and pursuing you.

As many consumers believe lenders, government agencies and landlords have the power to throw you and your family on the street, this often works for them.

Breaking safe - How to beat the banks

Actually, they usually don’t – at least not at first.

Don’t be intimidated by demands for payments that you can’t afford, or threats to send the bailiffs round. Creditors can do nothing without a court order, and that includes coming into your home to take away your possessions. They know this but they count on your ignorance and hope to intimidate you.

It’s particularly important to know the rules when it comes to Bailiffs. As you can see from our article on what to do if the bailiffs knock on your door, they can’t force their way in. Just be careful not to open the door to them or have any other entrance open that they could use.


Step 4: Know your rights

  • The Office of Fair Trading decrees that debtors must be treated fairly, free from harassment.
  • If creditors become really nasty, you should report them to the OFT for breaking those rules.
  • If private debt collectors arrive on your door step without an ‘execution warrant’ issued by a County Court, deny them entry and report the firm and the creditor to the police: they are breaking the law. That’ll shut them up for a bit.


Get advice on how to deal with creditors

Use charities that offer free advice and will help you organise a debt management plan.

Any of the steps above can be done with the help and support of one of these free organisations.

Don’t pay for help – the paid ‘advisers’ are often not as good as the free ones anyway.

  • Citizens Advice Bureaux (CAB) which provide free, confidential and independent advice from thousands of locations in the UK
  • StepChange is a debt charity offering an online debt remedy service and free debt advice in person or on the phone.
  • Christians Against Poverty is a national, free debt advice service that runs through local churches.
  • Nationaldebtline is a website offering a guide to dealing with debt – and has some useful sample letters for writing to creditors.
  • Payplan is a free debt management company funded by the credit industry, which makes repayment arrangements
  • Shelter is a great resource if you are having problems with your rent or mortgage. They can stop you being turfed out of your home, even if you’re about to go to court.
  • – the largest support network for free, independent advice centres in the UK

Couple having a meeting with a financial advisor

These organisations can do everything from helping you create a budget to negotiating with your creditors and dealing with legal issues.

Even if you have to wait for help (they are all in high demand) it’s still worth it.

Here at we also offer lots of free advice to help you organise your finances and start making a dent in those debts. Learn how to detox your finances and read our guide to beating your credit card balance. You can also sign up to our free debt action plan e-mail service.

Make sure you are also signed up to our free weekly newsletter which always has handy articles to help you save and make money every day.


Get the free MoneyMagpie debt action plan emails and find out more about how to deal with creditors


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Anthony Bellasario
Anthony Bellasario

Dealing with creditors is such a pain. I just cleared all my debt last month. I went through a lot of mental torture. I wish I had read your article earlier. I appreciate what you are doing. Thanks!!


i have had debt for 6 years this year and lived over seas so the collectors could not find me on my return i have had letters but have not responed to all of them, some i have paid but i now got another letter today, can they touch me now that it is 6 years as i thougth the debt became barred or something like that. help would be great in this matter.

CCCS Pavan
CCCS Pavan

Hi Dovecove,

Your debts would only be statute barred if you haven’t received a CCJ or admitted the debt within the last six years. If you have made payments or written to them within this time period, the debt is still enforceable and you need to make an arrangement to pay.

I’d recommend that you get in touch with a charity like us and we’ll be able to look at your situation in more detail and recommend the best action for you.

Kind regards,

in the same boat
in the same boat

Have been in serious debt since 2008 40K + Mortgage and instigated the help of a reputable debt couselling service, they charged me 3 months up front and nothing got paid off debts until 2009, since then been able to repay nearly 18K off and half way there. Just wondering how my creditors would react if i went to CCCS or payplan now its would save me £100 pcm thats £1200 per annum extra off debt and maybe shorten the term. I am worried that more CCJs will appear if I suddenly change debt services. One thing is for sure… Read more »


I don’t think your creditors would mind if you switched to a reputable charity like CCCS. Why not give them a call and tell them your situation. I know that they have taken people quite often who have had a bad experience with debt management companies so this shouldn’t be any different. They might even be able to negotiate better terms with your creditors now that you have proved that you can pay off a lot of your debts. Well done, by the way. You’ve paid of a LOT! Keep going.

anonymous anon
anonymous anon

That’s exactly what I have been doing for the last 2 years, I negotiated small payments will all my creditors. One of them got a charging order against my property while still charging 20% debit interest. If only they scrapped the interest I would make progress with my repayments instead I’m £50 worse off each month even by making regular payments.


Well done you for sorting it out. How about speaking to one of the free advice agencies to see if they could negotiate with the company that has a charge against your property? Let me know how it goes. As you say, it would be much better if they didn’t charge that interest.

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