Dealing with non-priority debts
At present, the Benefits Service do not provide debt or money advice but we have listed some details below that you may find helpful
Contact your non-priority creditors
To decide what debts are non-priority, please see our Identify Priority Debts page
Then, contact each of your non-priority creditors by phone, email or post. Whichever way you use, send each a copy of your completed financial statement, together with a covering letter that briefly explains why you have financial difficulties and what you are asking the creditor to do.
What if a debt is with a collection agency?
Contact the agency instead of the creditor, but do not treat the debt any differently. Debt collection agencies have no more powers than creditors. Like creditors, they cannot send bailiffs to call unless they have a County Court Judgement and Warrant from the county court.
What if a debt is with my bank?
If you have an overdraft or other debt with the bank into which your income is paid, be careful. The bank can take money out of your account to pay money you owe them. If the bank does not agree to your offer or other request, arrange for your income to be paid in to another account. It is often a good idea to open a bank account that is not associated with any of your creditors to protect your income
Find out about basic bank accounts on the Money Advice Service website
Could I get help to pay my water bill?
If you are struggling to pay a Water bill and are in financial hardship, you may be able to get additional support
Thames Water customers may be able to get a grant Any grant is usually a one-off payment only; the Fund does not provide a constant discount off bills. To get more information or an application form, call 0845 456 6863 or visit the Customer Assistance page on the Thames Water website.
Essex & Suffolk Water customers also offer several financial support schemes.
What if I have a mortgage shortfall after my home is repossessed?
If you had your home repossessed, you may later be told you still owe money. This happens when the sale of the property did not cover all of the outstanding mortgage and/or secured loans. The money you still owe is called a ‘mortgage shortfall’. It is a non-priority debt but can be for a large amount.
Get more information on how to deal with a mortgage shortfall on the National Debtline website.
How much should I offer the creditors for each of non-priority debts?
One way to work this out is to divide the money on a pro rata basis; the larger the debt, the larger the monthly offer of repayment. This way is commonly used by debt advice organisations and the courts.
To work out pro-rata offers, for each debt in turn:
- Divide the amount owed on that debt by the total owed on all your non-priority debts.
- Multiply the answer by the amount of money you have left each month for non-priority debts.
- This gives you the monthly offer for that debt.
Example: Mark and Sarah have £30 a month to pay the following debts:
- Credit card - £1,600
- Bank loan - £650
- Phone - £450
Total owed: £2,700
Their offers for monthly payments are:
- Credit card - £1,600/£2,700 X £30 = £17.78 a month
- Bank loan - £650/£2,700 X £30 = £7.22 a month
- Phone - £450/£2,700 X £30 = £5 a month
What if my offer is less than the interest?
If your offer is less than the monthly interest being charged on a debt, ask the creditor to freeze interest and charges.
What do I say in my letter?
We have created a sample letter to ask a non-priority creditor to accept reduced payments.
Amend and send the letter to each creditor with your financial statement.
When should I start paying?
As soon as you can, do not wait for the creditor to accept your offer. Some creditors wait for payments to start before they will agree to an offer.
If you do not have money for non-priority debts
This may be because your income is very low or because any excess income is going to priority debts. Any arrangement with your creditors to agree depends on your current circumstances and will be reviewed periodically to check whether anything has changed.
I can afford token payments now and maybe more later
You could ask each creditor to accept, say, £1 or £2 a month for the time being, freeze interest and review the situation in, say, six months.
Why not use our sample letter to ask a non-priority creditor to accept token payments for the time being? You can download it
Amend and send to each creditor with your financial statement.
I cannot afford token payments now, but may be able to afford to pay later
You could ask each creditor to suspend payments for the time being, freeze interest and review the situation in, say, six months.
Why not use our sample letter to ask a non-priority creditor to suspend payments for the time being?
Amend and send to each creditor with your financial statement.
If you are working, creditors will probably expect you to pay something. Check again to see whether you could afford token payments.
I will never be able to afford repayments
If you are never likely to work because, for example, you are ill, disabled or your circumstances are never likely to improve, creditors may agree to write off the debts
Why not use our sample letter to ask a non-priority creditor to suspend payments for the time being?
Amend and send to each creditor with your financial statement and medical evidence.
If you own your own home, get advice before asking for debts to be written off as creditors may try to secure them against your home.
