If you're in financial difficulty, it can feel daunting to open up about it, especially to someone you've never met. However, telling your creditors about your money struggles will help them to help you.
It’s important to know that speaking to creditors doesn’t automatically mean debt collectors will get involved or that you’ll be taken to court. In most cases, creditors just want to work with you to find a solution.
We've created a checklist to get you through those difficult conversations - and put you back in the driver's seat.
Creditors are individuals or companies that have lent you money or provided services you've agreed to pay for later. This includes banks, credit card companies, mortgage lenders, and utility providers.
When you borrow money, you become the "debtor", and they become your "creditor." Most creditors prefer to work with customers who are struggling rather than taking legal action, and many have teams specifically trained to help people in financial difficulty.
Ideally, it's best to contact your creditors to let them know if you're not able to make your next payment - before they contact you. If you give them enough warning, they may be able to put a plan in place to prevent any damage to your credit score. They may even be able to put communication on hold to give you some breathing space.
❗Note: They might not always agree, but it's always worth asking. If you don't ask, you don't get.
The rules have changed to protect you! Companies that lend money must now follow strict guidelines when customers face money problems.
Here's what they MUST do for you:
• They must look for signs that you might be struggling with payments and offer help early
• They must give you different options to manage your repayments
• They must explain things clearly without complicated terms
• They must treat you with respect if you're going through difficult times
• They can't charge excessive fees just because you missed a payment
• They must explain how any payment plan will affect your credit score
• They must give you enough time to consider your options
• They must look at your complete financial situation, not just their own debt
These companies must also have dedicated help sections on their websites with tools and direct contact information for their support teams.
If a company doesn't treat you fairly, you can get free help from the Financial Ombudsman Service. They can make the company correct the situation.
Before you speak to creditors, it's a good idea to get a clear picture of your finances. Understanding where your money goes each month will help you feel more confident and in control.
Start by looking at your bank statements to see how much money comes in and what you spend it on. Apps like Emma or Snoop can help you track your spending. Many banks also now have tools in their apps that sort your spending into groups for you.
Once you’ve got a full list of your income and essential outgoings (like rent or mortgage, Council Tax, food, and utilities), you’ll be able to see how much – if anything – you can afford to put towards your debts.
💡Tip: Always tackle your priority debts first. Missing payments on things like your rent, mortgage or Council Tax can lead to more serious consequences than missing a credit or subscription payment.
Having a budget ready means you'll feel more prepared when you speak to your creditors – and you'll already have the numbers to hand when they ask about your situation.
Before you make contact, have paper and pen ready to take notes. Write down names and dates to keep a record of the call. If there is any disagreement later about what was said, you'll have something to refer to.
It’s also okay to take breaks during the conversation, or ask for time to think before agreeing to anything. You’re allowed to pause and come back later if you need to gather more information or talk things through with someone you trust.
💡 Tip: Whatever method of communication you choose, keep a record. Save any letters, screenshots or confirmation emails, and make notes of who you spoke to on the phone and what was agreed.
Make sure you have your account details ready, including your reference number. If you have a password for the account, have it with you in case they need it for security.
If you feel comfortable, explain why you're having money problems right now – for example, if you’ve lost your job, your hours have been cut, or you're dealing with illness or other personal circumstances.
Your creditors will likely want to understand your financial position, including your income and outgoings. If you’ve already made a budget, you’ll be able to refer to it here – showing clearly what you can (and can’t) afford.
Since the economic changes of recent years, many companies now have better support in place for customers facing financial challenges. Don’t be afraid to say how current events have affected you – honesty will help them tailor the right kind of support.
💬 Too overwhelmed to call? It's completely valid to write instead. If speaking feels too stressful, use secure messaging through the creditor's website or app. Most companies offer this option, which is faster than mail while still giving you time to craft your message.
Organisations like StepChange and Citizens Advice offer sample letters you can customise with your details and financial breakdown.
After going through your income and spending, be ready to answer questions about your expenses. If you can cut back on some things to help pay your debts, consider doing so. Companies will appreciate it if you're willing to make some changes.
However, never feel pressured to pay more than you can afford. If you can't realistically cut back on essential spending, be firm and let them know. They should be able to work with this and make a fair plan.
Depending on the company and your situation, they may offer you a:
Remember, they don't have to agree to these options. They might suggest something different. Each company follows their own rules. But it doesn't hurt to explore all options to find what works best for you.
Before agreeing to a plan, ask how it will affect your credit score. Some payment plans may hurt your score more than others.
Many lenders now use better systems that show different types of payment plans separately on your credit report. Some offer "breathing space" plans with less impact on your score if you stick to them.
The main credit agencies (Experian, Equifax, and TransUnion) now use special codes on credit reports to indicate when accounts are in payment plans or hardship arrangements, which provides more context than simply showing missed payments.
Also ask how you'll catch up after the plan ends. While a payment break itself won't hurt your credit score directly, higher payments afterward might be hard to afford – and missing those can lower your score.
You could call organisations like StepChange or Citizens Advice for free, independent advice. They can even contact companies for you if you don't feel comfortable doing it yourself.
Other trusted organisations include Money Wellness, MoneyHelper, National Debtline, and PayPlan. Many of these services offer online chat, video appointments, and helpful online tools.
The government's Breathing Space program (officially called the Debt Respite Scheme) gives legal protection for people with serious debt problems. This program gives you up to 60 days of protection from creditors while you get debt advice.
If you're getting treatment for mental health crisis, protection can last during your treatment plus 30 days. Debt advisors can tell you if you qualify and help you apply.
Money worries can feel overwhelming, but millions of people face similar challenges. With stronger protections, companies must help find solutions that fit your situation.
Reach out, explain your situation, and take that first step toward financial peace of mind. You can do this.
Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.
Fiona is a personal finance writer with over 7 years’ experience writing for a broad range of industries before joining Ocean in 2021. She uses her wealth of experience to turn the overwhelming aspects of finance into articles that are easy to understand.
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