How to deal with creditor calls

There is nothing quite like having a call from a creditor, especially when they are looking for a payment.

Just the thought of a creditor calling can be enough for some people to be so scared that they'll avoid answering their telephone. This is particularly true when there isn't the means to pay the creditor anything until next month.

However, it is important to realise that communicating with your creditors is the key and ignoring then could be more damaging in the long run.

Communication Is Key

If you've not notified your creditors of your financial difficulties beforehand, the first contact you'll probably receive from your creditors will be from one of their recovery team, or late payments department.

They'll be keen to find out why your payment didn't get made and to establish when you intend to make your next payment.

Different creditors have different tactics and will vary their tactics depending on how much you owe them and, strangely enough, it can be the creditors who are owed the least money that apply the most pressure.

If you put yourself in the creditor's shoes for a moment, you'll see why. If somebody owed you £20,000 it's unlikely that they'll repay you any quicker just because you threaten to take action because any payment they could make would barely make an impact on the actual debt owed.

Whereas, if somebody owed you just £300, you maybe able to influence them into making a payment, just to reduce the pressure you're applying and any size payment would have an impact on the outstanding balance.

Not all creditors will call you regularly, indeed, some may not call at all, but when they do call the type of phone calls you can expect from creditors can vary immensely, from a courteous call and a gentle reminder to a full threat of legal action against you should you continue to avoid payment of the debt.

5 Golden Rules

Here are some golden rules that you can use to assist you when your creditors call

  1. Stay calm and be polite, even if the person on the other end of the phone is being rude to you. Entering into a slanging match will not solve the problem.
  2. Take the name of the caller and the name of the creditor concerned and keep a date and time log of your conversations as it may be useful later on.
  3. Keep your call courteous, short and to the point, and try to avoid being engaged in a conversation about your repayments but do explain any mitigating circumstances.
  4. Do not make a promise of a payment you cannot keep, as this can make the calls even more difficult later on. It's better to be realistic with your expectations and to manage the expectations of the creditor.
  5. Try to keep control of the call. Remember, you are the still customer and you haven't broken any laws. You're merely struggling to repay a debt.

Then, depending on your situation :

  • If you are entering into an Individual Voluntary Arrangement (IVA):
    Give the name, address and telephone number of your Insolvency Practitioner to the creditor, and explain to them that you are in the process of proposing an IVA. Ask them to contact your insolvency practitioner, as they are dealing with all your finances and have instructed you to refrain from making any payments to your creditors at all.
  • If you are entering into a Debt Management Programme:
    Give the name, address and telephone number of your debt management company to the creditor. Explain to them that you are in the process of setting up a Debt Management Plan. Inform them that your debt management company is dealing with all your financial affairs and have instructed you to refrain from making any payments to your creditors.
  • If you have decided to declare yourself Bankrupt:
    Explain to the creditor that you are unable to make any further payments and you will be contacting your local County Court with the intention of petitioning for your own bankruptcy.

Keep control

The primary objective is to keep control of the call. If you're losing control, take a break.

Simply explain that you no longer have time to discuss it and ask them to call back at a more convenient time. If necessary, arrange another time to discuss your situation and terminate the call.

Professional Advice

If you're still undecided as to which debt solution is the most suitable for your personal circumstances then you should seek professional advice.

The team behind My IVA Adviser are here to help you whenever your ready. Simply call our helpline on 0800 088 7503 or, if you prefer, complete this form and one of our advisers will call you at your preferred time.

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In accordance with the Financial Conduct Authority's guidance, please follow this link if you would like to read a free guide about In Debt - Dealing with your creditors
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