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This guide is not relevant in England and Wales
For a version of this guide that covers England and Wales, please click here.

This guide tells you how to deal with your non-priority creditors, such as credit cards, unsecured loans and overdrafts, if they refuse to accept the payment offer you have made them. If you are trying to deal directly with your creditors and negotiate an affordable repayment plan, this guide has useful information and advice on tactics you can use. Contact us for advice if you are unsure whether your creditors are priority or non-priority.

Use this guide to:

  • respond to a refusal of your offer;
  • get interest on your debt frozen;
  • find out what action creditors can and can’t take; and
  • make a complaint about your creditor.

The sample letters mentioned in this guide can be filled in on our [website]().

If a creditor refuses my offer

When you write to your creditors making an offer of payment you often get a mixed response; with some creditors accepting your offer and some refusing. If a creditor has refused your offer of payment then you can use the Reconsider my pro-rata offer sample letter to ask them to reconsider.

  • Explain your circumstances again and enclose a personal budget.
  • It is a good idea to start making the reduced payments you have offered on a regular basis and point out that you are doing this as a ‘gesture of goodwill’.
  • It is also worth telling them if any of your other creditors have accepted your offers.
  • If you can afford to, send photocopies of letters from your other creditors as proof.
  • Explain that you are unable to increase your offer of payment to this creditor without upsetting the other arrangements you have made. Point out that you have to treat all your creditors fairly.

If my creditors refuse to freeze interest

If a creditor has accepted your offer of payment but is still adding interest, then use the Freeze interest sample letter.

Sometimes creditors refuse to freeze the interest altogether or only agree to reduce the interest that they are charging.

If your creditors are refusing to freeze interest, carry on making the payments you have offered anyway.

If your offer of payment is less than the interest that is being added on, then the debt will just increase. This means you are never going to pay the debt off. Explain this to your creditors. This means that there will be no ‘light at the end of the tunnel’ and less incentive for you to keep up with the payments. Contact us for advice.

What if my offers are still refused?

Your creditors do not have to accept your offer of payment or freeze interest. If they continue to refuse what you are asking for, carry on making the payments you have offered anyway. Keep trying to persuade your creditors by writing to them again.

It is very important that you don’t give up if your creditors refuse your offer. Make the payments that you have offered and ask the creditors to reconsider. Stick to your guns. If you let creditors persuade you to pay more than you can afford then you may fall behind with your mortgage/rent or your other essential household bills. You may also find you do not have enough money left to live on.

  • You can continue to make the reduced payments you have offered and wait to see whether the creditor takes court action.
  • You can continue to make the reduced payments you have offered in the hope that the creditor will change their mind and accept the offer eventually.
  • You can continue to make the reduced payments and ask your creditors to reconsider their refusal to freeze or reduce the interest. This is particularly important when the interest being added is higher than your offer of payment.
  • Consider making an application for a debt payment programme under the Debt Arrangement Scheme. See The Debt Arrangement Scheme and how it may help you later in this guide.
  • Consider applying for a time order under the Consumer Credit Act 1974.

Interest on a decree

In Scotland, interest is usually charged on debts before and after a decree. This means that the court will allow the creditor to add interest either at a set court ‘judicial’ rate or even at the contractual rate if that is what the creditor asks for.

Passing your account on to collections

Collections departments, debt collectors and solicitors have no more powers than the original creditor; all they can do is ask for payment. If you receive a letter from any of these, write to them and explain your situation. The Continue accepting my offer sample letter and the Reconsider my pro-rata offer sample letter may be useful.

A debt collector can only visit your home with your permission when the debt is deadlocked. The debt is deadlocked if you have offered to pay what you can afford, but the creditor is still unhappy with the offer.

See our Harassment by creditors and debt collectors guide for more information.

  • Do not let them persuade you to pay more than you can afford.
  • Debt collectors normally collect debts by phoning or writing, but they are sometimes allowed to visit your home.
  • Debt collectors have no right to enter your property or remove your goods. You do not have to let them in.

If a creditor sends you a default notice

  • Creditors may send you a ‘default notice’ telling you how much you owe and that they may take further action if you don’t pay.
  • Creditors usually send this before sending your account to their collections department, a debt collector or solicitor. Creditors have to send you a default notice for agreements regulated by the Consumer Credit Act 1974 before taking court action. If you get a default notice it does not mean you will definitely be taken to court.

If a creditor threatens court action, don’t panic.

  • Taking court action should always be the last resort for a creditor.
  • Remember, it is not a criminal offence to be unable to pay your debts. You cannot go to prison for this reason. The court is there to settle disputes about money owed and how to repay it.
  • You will still make an offer based on your ability to pay. If you have no spare income, you should still make an offer of £1 per month.

See our Sheriff court action guide for more information.

Things your creditors cannot do

Your creditors are allowed to contact you from time to time to ask you for payment, but they must not threaten or harass you. You may be able to complain to the Financial Ombudsman Service (FOS) if they do. Contact us for advice.

See our Harassment by creditors and debt collectors guide for more information.

In the following section we cover some of the threats creditors may make.


You cannot be imprisoned because you are not able repay your non-priority debts.

Take goods from your home

Creditors cannot send someone to your home to remove goods just because you cannot afford to pay what they want.

Bailiffs or sheriff officers can only be used if you have a court judgment and you miss a payment that the court has ordered you to make. If a bailiff is trying to collect a debt from you, contact us for advice.

Your home

For debts not secured on your home, your creditors cannot take repossession action just because you are unable to pay what they want. But they might get an inhibition. This is a court order preventing you from selling property such as your house and any land or business premises you own. This is to avoid you disposing of a major asset and not paying your creditors. The inhibition lasts for five years and then runs out, but the creditor could ask for it to be renewed. The inhibition will also stop you from taking out further borrowing secured on your property. However, an inhibition will not put your property at risk. This is only an option if you own your own home, rather than rent it.

If you want to sell your house or business premises, you will have to give permission for your solicitors to take the amount owed to the creditor from the proceeds of the sale of the house. This is after paying the mortgage, the estate agent’s, advertising and the solicitor’s fees. The solicitor will need to pay the money to the creditor in return for the creditor lifting the inhibition and allowing the sale to go ahead

Your wages

Creditors cannot have money taken out of your wages just because you cannot pay what they want. A creditor can only try to do this if you have a sheriff court decree and have missed a payment you have been ordered to make. You may still be able to ask the court to let you pay by instalment instead.

Creditors will sometimes demand information they do not need, for example, your employer’s address, or your bank account number. You do not have to give this sort of information to them if you do not want to. If they take court action, you will be asked to provide some information about your employer and bank account on the court forms.

See our Diligence guide for more information.

Should I choose another option?

There may be better ways to deal with your debts. Your options depend on your circumstances at the moment, but you also need to think about how your circumstances could change.

  • Can you afford to repay your debts in a reasonable time, or do you expect your circumstances to improve so that you will be able to repay them?
  • Do you have assets that prevent you from choosing certain options?
  • Are there any other reasons why some options won’t be suitable?

See our Ways to deal with your debts guide for more information.

Some options may not work in the way you expect. Learn about all the available options before you make a decision. If you aren’t sure which options are available to you, or you need advice about your options, contact us for advice.

The Debt Arrangement Scheme and how it may help you

The Debt Arrangement Scheme (DAS) may allow you to apply to have your debts included in a debt payment programme (DPP). In order to apply for this you will need to contact an approved money adviser.

Before making an application for a DPP, the money adviser will contact your creditors again and advise them that an application is being made. The money adviser will ask your creditors to freeze the interest on your debts. They may also ask the creditors to consider a composition (in other words, a partial write off of some of the debt). The DAS scheme will be administered by the Office of the Accountant in Bankruptcy.

If you are successful in applying for a DPP a payment distributor will be appointed to deal with your case. This will allow you to make one regular monthly payment which will then be distributed amongst your creditors. If you keep to the agreed payments, your creditors will not be able to use diligence against you.

See our Debt Arrangement Scheme guide for more information.

How to complain

Financial Ombudsman Service

Under the Consumer Credit Act 2006 there are new rights to complain to the Financial Ombudsman Service about how your lender or debt collection agency has dealt with your account.

You will have to follow the lender’s complaints procedure first. You can only complain about events that happen from April 2007 onwards. The address for the Financial Ombudsman Service can be found under Useful contacts later in this guide.

See our Complaining about your lender guide for more information.

The Standards of Lending Practice

If your complaint is about a bank or building society then they should have a complaints procedure under the Standards of Lending Practice. If you do not feel they have dealt with your complaint satisfactorily, you may be able to complain further to the Financial Ombudsman Service. The address is under Useful contacts later in this guide.

Trade Associations

If you feel your creditor is unreasonably refusing your offer of payment then you should ask if they are members of a trade association.

Most trade associations have codes of practice that their members must follow. Ask the creditor for details of their complaints procedure. You will usually be expected to make a complaint to the creditor before taking it up with the trade association. There is a list of the most relevant trade associations under Useful contacts later in this guide.

Useful contacts

Consumer Credit Association (CCAUK) Phone: 01244 394 760 www.ccauk.org

Consumer Credit Trade Association (CCTA) Phone: 0127 471 4959 www.ccta.co.uk

Credit Services Association Ltd (CSA) Phone: 0191 217 0775 www.csa-uk.com

Debt Arrangement Scheme Phone: 0300 200 2770 www.dasscotland.gov.uk

Finance & Leasing Association (FLA) Phone: 020 7836 6511 www.fla.org.uk

Financial Conduct Authority Phone: 0800 111 6768Email: consumer.queries@fca.org.uk www.fca.org.uk

Financial Ombudsman Service Phone: 0800 023 4567 www.financial-ombudsman.org.uk

The Law Society of Scotland Phone: 0131 476 8137 www.lawscot.org.uk

Complaining about your lender guide

Debt Arrangement Scheme guide

Diligence guide

Harassment by creditors and debt collectors guide

Ways to deal with your debt guide

Sheriff court action guide

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