If you’ve been caught off guard by higher bills and you’re worried about missing a payment, letting your creditor (any organisation you owe money to, for example, housing, gas, electricty or the council) know and having early conversations with them is the best first step to resolving your money issues and avoid falling into problem debt.
Find out how to take steps to help - or download our guide Talking to your creditor.
Asking for help may be the last thing you want to do, but there are benefits to reaching out to your creditor first about your money struggles.
Creditors have a responsibility to support you and treat you fairly by offering affordable options to help pay off what you owe.
You should never feel pressured into paying what you can’t afford, so it’s your right to let your creditor know what you’re able to offer them so they can work around this and come up with a fair arrangement that works for both of you.
If you know you’re not going to be able to make your next payment, giving your creditor enough warning means they might be able to put a plan in place to help you before things get worse.
Continuing to ignore the problem might mean you’ll face interest and late payment charges and eventually a loss of service, goods or put your home at risk.
Telling your creditor that you’re struggling will help them to help you. They should offer a range of support options that will work for both of you so it’s worth finding out what they can do.
If you have a physical disability, experiencing mental health problems or are vulnerable, they might also have specialist teams to represent and support you along the way.
Creditors can work with you to agree more flexible payment arrangements. By doing so, you can avoid borrowing more money to pay them, which ultimately will cost you less.
Be aware, some solutions offered will affect your credit score, so it’s worth finding out before agreeing to a plan.
Creditors can connect you to charities or other support that offer grants to help you pay your bills that you won’t have to pay back.
For example, the British Gas Energy Support Trust offers grants to people struggling with fuel costs, and you don’t have to be a British Gas customer to apply.
Some creditors might be able to offer you better tariffs or deals more suited to your needs and budget.
For example, if you’re on a low income or vulnerable, water, energy and broadband companies offer tariffs that guarantee you’re on the cheapest deals or which cap your bills.
Think it’s not worth it? We sort the fact from the fiction about talking to your creditor if you have money struggles.
Fact: While they’re interested in the money you owe them, it is more expensive for your creditor to take drastic action, such as cutting you off or taking you to court. They want to sort things out at an early stage because it's better for both of you.
Many companies also have extra support in place just for situations like this, and they should work with you to come to a fair and affordable arrangement that suits them and your financial circumstances.
Fact: That’s a last resort that no one wants.
Ultimately, your provider has the power to terminate the service it provides to you, but only if you refuse to engage with them and continuously fail to make any payments towards your bill.
There are exceptions to the right to terminate services. For example, water companies are not allowed to disconnect or restrict your water supply even if you owe them money.
Fact: With rising living costs and in the aftermath of the pandemic, creditors are expecting lots of people to be struggling right now. They will always want to talk to you and hear what you have to say.
To ensure they will listen, always be honest about your situation, don’t promise things to your creditor you can’t commit to.
Make sure you provide evidence, such as doctor’s letters if you need to. That will help them get the right support in place.
Fact: Providers you owe money to can’t make you pay something you don’t have, so talk to them before you miss a payment. Telling them about your situation and showing you don’t have the money means they have to work around this.
They might allow you to take a break from making payments in the short-term or offer lower payments over a longer repayment term. If you’re really struggling, you can request a full or partial write-off of the debt in most serious cases.
Before contacting your provider, the first step is to take the time to get organised. Here’s what you need to get started.
Dig out and gather all the paperwork you have related to your bills.
Then go through it by writing down your account numbers and balances, payment due dates, monthly payments, how much you owe and contact details for the creditors.
Consider using a spreadsheet to organise your list of bills so you can easily track your payments, see how much you owe and pay each month.
Some bills are more important than others, so it's important to tackle them in the right order.
Once you’ve got your list in place, you can use our Bill prioritiser to help sort out which bills to deal with first and find out how to avoid missing payments
There are also useful tips on extra support that might be available that mean you can sort things out yourself.
Sort your payments out with our Bill prioritiser
If you have several firms you owe money to that you’re unable to pay back, focus on priority payments first like your rent or mortgage, Council Tax or Rates, gas and electricity bills, as they have the most serious consequences if you don’t pay anything towards them.
If you've missed payments, speaking to several creditors can feel overwhelming, so you can talk to a debt adviser first. They could even speak to your creditors on your behalf. They offer advice online, over the phone or near to where you live.
Talk to someone today using our Debt advice locator tool
Getting organised, thinking about what your creditor might ask and how you'll contact them can make conversations easier.
Having all the information and account details you need on hand, including important reference numbers can help to keep you focused on the facts and make you feel more in control of the conversation as you'll be able to answer questions more easily.
If you’re asking for help because something has happened, for example you’ve lost your job or are struggling because of illness or accident, bereavement or relationship breakdown a doctor’s letter or recent bank statements that show your drop in income are useful to have nearby.
If you’re missing any documents, you can ask your creditor for copies or access them through your online account if you have one.
If it will take too much time to find things or you don’t feel up to looking, you shouldn’t let any missing documents stop you having a conversation with your creditor.
This is especially true if you’re vulnerable or suffering from low mental health and this feels like too much of an ask. Your creditor would rather you contact them and you can figure out what documents they need together.
Before you get in touch with your creditor, it’s a good idea to take the time to look at your income and essential outgoings to figure out how much you can afford to pay.
If you want to do a detailed budget, you can use our Budget Planner to help you. It only takes 20 minutes to fill in.
You don’t have to use fancy spreadsheets or planners. Some people use exercise books or you can use an online app.
However, don’t worry if you can’t do this, your creditor will be able to go through it all with you and work it out.
Remember, everyone’s situation is different, and creditors should support and treat you fairly.
Our Budget Planner can help you understand how much you can offer your creditor
Hopefully, you’ll feel less stressed if you choose a way to contact your creditor that feels most comfortable for you. Here are the things to think about.
By phone
Pick a day and time that suits you, so you won’t have to leave the conversation to deal with other commitments.
Remember, contact centres often have busy times, so, if you can, it’s best to call them mid-morning or mid-afternoon or early evening instead of lunch time or first thing in the morning.
Online chat or WhatsApp
Consider using online chat or WhatsApp if you haven’t already. It puts you more in control of the conversation and you can respond in your own time.
By email or letter
If you’d prefer to email or send a letter Citizens AdviceOpens in a new window and StepChangeOpens in a new window have lots of sample letters you can use, for example, if you can’t afford to keep up with payments or want to ask for a temporary payment arrangement.
Remember, it may take a little longer to get a response, so better to use if your query isn’t urgent.
Look at the back of your bill or statement for ways to contact your creditor
Dealing with money troubles can be stressful. It helps having someone you trust to help support you through the process, whether that’s helping you write and proofread your correspondence or helping you practise what you’re going to say.
A family or friend you trust can even act as your representative if communicating with the provider would be difficult for you.
It’s important to be honest about your situation and be as open as you feel comfortable with about anything that will help explain why you’re experiencing difficulty. Follow the below structure to help your conversation.
Contacting your creditor can be daunting, especially if you’ve never done it before. Here is a checklist to get you through those conversations.
The most difficult part is often finding the time and plucking up the courage to reach out to your creditor and ask for help.
But acting now could save you money and stress in the long run.
Having a conversation will give you the chance of working out a solution with your creditor before you miss a payment, and you might be surprised at how much better it makes you feel to take back some control of the situation.
Write down the main points you want to say and what you're struggling with.
Take notes during your conversation including the date and time of the call, the name of the person you're speaking to and the options they give you.
If you’re sending an email, copy yourself into the message so you can find it later.
Keep your notes in a safe place – they are a record of everything you’ve discussed.
Consider asking a family member or friend you trust for support and ask if they’ll do a practice phone call.
If you’re going to email your creditor, ask someone to check through the message before you send it.
You can also ask a friend or family member to speak on your behalf if you’re worried about the conversation. You’ll have to give permission.
Let your creditor know if you’re struggling with your mental health, cognitive or a physical disability or have a vulnerability, for example, you’re a single parent, carer or an older person. Most creditors have teams that can offer extra dedicated support.
If you think you might have difficulties in communicating with your provider, you can ask someone you trust to act as your representative. You can also ask your creditor to see if they have a representative or appointee service or interpreting services for people with additional needs.
Also let them know if it will take you time to respond, for example, if you rely on someone else to help you communicate.
When you come to a new agreement, ask your creditor to email or send you a letter confirming the changes. This is so you have proof of your new arrangement.
You might also need to follow up the conversation with further information, including any documentation you’ll need to provide, for example, proof of unemployment.
Here are some solutions a provider might offer you. Before agreeing to a plan, make sure you understand any impacts on your credit score.
After your creditor goes through your income and outgoings with you to see how much you can afford to repay, they might allow you to:
Your creditor might let you take a payment holiday (also called a deferral). This usually means you can either:
Be aware that, with financial products, interest may continue to build up in the background, so you may end up paying more in the long run. Always ask how much this is likely to be.
A payment holiday is likely to be added to your credit file and can have an impact on your credit score. However, this will have less of an impact than if you miss payments, as long as you keep up to date with your new agreement.
As well as offering you more flexible payment arrangements, your creditor should also check if you're on the best tariff for your needs.
They may be help you move to a cheaper tariff that better suits your budget and usage.
The best tariffs (also called social tariffs) are often for people who are getting certain benefits or who have other needs.
If you’re struggling, with payments, your provider may be able to check you’re claiming any benefits you’re entitled to, so you qualify for the best tariffs and products to lower your bills.
Social tariffs are available for water bills, while some creditors offer social tariffs to help you make mobile calls and get online if you’re getting certain benefits.
Depending on your provider and circumstance, they might allow you to:
Remember, you may only be able to sell or hand back items if your contract allows you to.
Creditors usually only write off debts where there is very little chance of them getting their money back in full. For example, if you’re experiencing or facing a long-term mental or physical illness or will be permanently unable to work. You’ll need to provide proof of these circumstances before a provider will consider a write-off.
If you’re facing financial difficulty due to a temporary change in circumstances, then it’s unlikely that they’ll agree to write off your debts.
If you’ve reached a new agreement with your creditor, ask for confirmation in writing. Our checklist will help you with your next steps.
When you’ve come to a new agreement, be sure to get it in writing. Ask your provider to send a letter that outlines the new terms and conditions.
When you receive it, review the document closely to make sure that the agreement is correct and that no terms have been added or left out that you haven’t agreed to.
If there’s an error, make sure you contact your creditor to discuss your arrangements again and get a copy of the new agreement before making payments.
If everything is correct, start making your new payments and stick to the plan.
It’s important to keep creditors informed about any changes to your financial situation.
Make a note of who you need to speak to if you have to call back. If you have agreed check-in points, put them in your calendar, so you don’t forget.
If your creditor wants to call you, say how you’d like to be contacted and give the best times they can reach you.
If you find yourself getting behind on your payments, speak with your creditor as soon as possible to find a new payment solution that works for you to get you back on your feet.
If there’s room to make a few cutbacks so you can meet your repayments, then this might be something to consider.
Learn how to cut back on costs and find ways to make your income go further in our guide Living on a squeezed income
Your creditor has to work with you to try and find a solution but sometimes it won’t be possible. They may then suggest referring you to debt advice. This can be a really good idea, particularly if you are struggling with other payments as well.
Some creditors can pass you straight over to debt advice on the same call but if you need more time to think or want to choose your own adviser, use our debt advice locator tool to find phone, online and face-to-face services in your local area.
Find out what to do if you feel you’re not getting anywhere or how to go about making a complaint.
If you find yourself in a situation where you can’t get a hold of your creditor, try again.
Consider communicating with them using a different method, for example, if you can’t get through by phone, send them an email or letter instead or try using webchat or WhatsApp.
Getting it all in writing is a good idea so that you have a record showing you’ve attempted to contact them, especially if you're close to missing a payment.
You can also ask for support from a family member or a friend you trust to help you make contact.
If you are struggling with missed payments, a debt adviser can often contact creditors on your behalf and may have contacts that can speed things up.
If you feel your creditor isn’t treating you fairly, let them know by writing a letter or email. You can find lots of tips to help you write a complaint at StepChangeOpens in a new window
You can take your complaint further if you feel your creditor hasn’t sorted things out by contacting the following organisations:
Need more help? Contact us for free and impartial money guidance if you need help with budgeting or making your money go further, whether that's online or over the phone.
Whatever your query we’re here to help. If we don’t know the answer, we’ll point you in the right direction to someone who does.
You can contact us via Webchat, WhatsApp, phone, our web form, or social media
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