Offer to non-priority creditor - letter by Citizens Advice
The Citizens Advice template letter to offer a reduced payment plan to a non-priority creditor helps individuals in financial hardship propose affordable payments and request a freeze on interest and charges. It is part of Citizens Advice’s widely trusted library of open, lawyer-vetted letter templates.
Offer to non-priority creditor - letter
[debtor name]
[debtor street address]
[debtor locality]
[debtor phone]
[debtor email]
[creditor name]
[creditor street address]
[creditor locality]
[letter date]
Your reference: [reference]
To whom it may concern,
Account name: [account name]
Account number: [account number]
I am sorry that I am unable to keep up my monthly payments to your company.
I am sick and unable to work. I have claimed benefits and am waiting to hear the outcome of my claim. My situation is unlikely to improve for at least 3 months.
I enclose a copy of my financial statement. This shows income and expenses for me and the offers I can make to my creditors. The offers have been worked out based on what I owe so that each creditor gets a fair share of the money.
The amount I can pay you is [monthly payment amount] a month. I will be able to make my first payment on [first payment date]. Please send a direct debit form.
Please agree to freeze interest and other charges on my account as long as I keep to the payments. I will let you know about any changes in my circumstances.
If you are unable to accept my offer and freeze interest and charges, please explain why. Thank you for your help and I look forward to hearing from you.
Yours faithfully,
[debtor name]
Enc: Financial statement copy
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About this template
What is this template?
This is a formal proposal letter from a debtor to a creditor to renegotiate debt repayments. It contains a specific monthly payment figure and a request to freeze interest, which is distinct from a simple notification of hardship. It is not a legally binding settlement agreement until the creditor formally accepts the terms.
When should you use it?
Use this when you have completed a financial statement showing a surplus and need to distribute it fairly among non-priority creditors. Use a 'holding letter' instead if you have not yet calculated your available monthly budget.
What's inside
| Clause | Name | What it does |
|---|---|---|
| Fill-in section | Reason for Non-Payment | The Debtor explains their current inability to work and provides an estimated period of 3 months for their situation to improve. |
| I enclose a copy of my financial statement | Pro Rata Offer | The Debtor offers a specific monthly payment amount based on a fair share calculation across all their creditors. |
| Please agree to freeze interest | Request to Freeze Interest | The Debtor requests the Creditor stop accruing interest and additional charges provided the stated monthly payments are maintained. |
Who it's for
- an individual debtor in the UK unable to meet monthly payments to a non-priority creditor
- a person waiting for benefit claim outcomes who needs to request a direct debit form
- someone with multiple creditors seeking to distribute income on a pro rata basis
How long it runs and how it's signed
England & Wales note
This version is drafted for England & Wales. Scotland and Northern Ireland differ on some points — for example notice periods and tribunal procedure. Tell GitLaw where you hire and it adjusts the draft.
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