What to Do When a Creditor Refuses Your Repayment Offer

A creditor can refuse your repayment offer. A debt collector is entitled to turn down a payment plan, though they should consider any reasonable offer, and a bailiff can reject an offer they consider unacceptable¹. What a refusal does not do is cancel the money you owe or stop you paying it. Some of the people you owe might reject your payment offer, but this does not mean they can reject your payments¹.

The practical answer is to keep paying what you offered, even after a refusal. The people you owe should still accept the payments and update your account¹. If your circumstances have not improved, National Debtline publishes a sample letter asking creditors to continue accepting your current payment offer³. If the refusal stands and the debt is unaffordable, the next step is free advice: National Debtline gives free, confidential and independent debt advice and can be reached on 0808 808 4000, 9am to 8pm Monday to Friday and 9:30am to 1pm Saturday⁴.

This page covers why offers get refused, the options when one is, how to use National Debtline, what an adviser can and cannot do, and what changes when the debt is a priority one such as rent or mortgage arrears.

Why a creditor might turn down your offer

A refusal is usually about the size of the payment, not about whether you are trying. If a creditor does not think your payment is fair, they could send you a default notice⁸. That is the main lever they hold: not a veto on your money, but a formal mark that the arrangement is not what was agreed.

Creditors are entitled to make reasonable demands for repayment, though there are limits on how they may behave, including not phoning at unreasonable times⁹. If a creditor refuses without giving reasons, ask them to explain why they have refused¹⁰. A refusal with no explanation is worth challenging, and a written record of the exchange helps if the conduct continues.

It also matters who is asking. Collections departments, debt collectors and solicitors have no more powers than the original creditor; all they can do is ask for payment¹¹. A letter from a solicitor is not a court order, and a debt collector at the door has no right of entry. Where a bailiff is involved, the position is different: if your offer is not acceptable to the bailiff it is within their rights to reject it, but you can contact the creditor directly or make a higher offer².

One more reason an offer fails is that it was never affordable in the first place. A budget built on figures that leave nothing for food, heating or travel will collapse within weeks. National Debtline publishes a simple guide to budget planning, and a realistic budget is what makes any offer stand up¹².

Your options when an offer is refused: DMP, DRO, IVA or bankruptcy

If a creditor will not accept an informal arrangement, the options are the same ones that exist for any unaffordable debt. The main solutions advertised in the UK are debt management plans (DMPs), individual voluntary arrangements (IVAs), bankruptcy, debt relief orders (DROs) and loan consolidation¹³. They differ in cost, in how long they last and in how much they bind your creditors.

A DMP is the softest option. The people you owe can refuse the DMP offer, and creditors do not have to enter into a debt management plan at all; they may still contact you asking for immediate repayment⁹. When a plan is being set up, creditors will sometimes agree to freeze interest charges, but they do not have to agree to this or to the plan¹⁴. Even so, most creditors will accept an offer of a reduced payment, and even creditors who reject proposals cannot reject the payments sent on your behalf¹⁵.

A DRO is a formal insolvency for smaller debts. To qualify you must be unable to pay your debts, and you will not be eligible if you are already bankrupt, are in an IVA or under an interim order, are subject to a bankruptcy restrictions order or undertaking or a debt relief restrictions order or undertaking, or have a bankruptcy petition pending unless a court has referred you¹⁶. Once a DRO is in place, creditors cannot contact you to ask for payment, take you to court, or send a debt collector to your home¹⁸.

An IVA and bankruptcy are the heavier options. An adjudicator could refuse your bankruptcy if you can pay off your debts or if another solution would be better for you¹⁹. Bankruptcy carries lasting effects: most lenders will either refuse you credit or charge a higher rate of interest²⁰. A debt relief order is not open to you if you are already bankrupt, are in an IVA or under an interim order, are subject to a bankruptcy restrictions order or undertaking or a debt relief restrictions order or undertaking, or have a bankruptcy petition pending unless a court has referred you¹².

Getting free help from National Debtline: phone, webchat or My Money Steps

National Debtline is a registered charity that provides free, impartial debt advice to more than 100,000 people each year, and its advisers have been helping people with debt for over 30 years²¹. You can call, webchat or use My Money Steps to get free advice²². My Money Steps is the self-help route: if you would rather not talk, it gives tailored advice about dealing with your debts, and it is available 24/7²². If My Money Steps is not right for you, phone advice and webchat are the alternatives²³.

The freephone number is 0808 808 4000⁵. Opening times are 9am to 8pm, Monday to Friday, and 9:30am to 1pm on Saturday⁴. Calling from abroad is not free of charge²⁴.

Free debt advice is also available from other charities and services, and the advice itself costs nothing²⁵. National Debtline, StepChange and PayPlan can set up a free debt management plan for you, handling payments and negotiating with the people you owe money to⁶. That matters because a fee-charging firm takes its money out of the same pot you are using to repay debts.

What a debt adviser can and cannot do for you

An adviser's main job is to work out what you can afford and put it to the people you owe. You can ask your other creditors to stop interest and charges, stop collection agencies recovering debt, accept token payments, or write off the debts²⁷. Those are requests, not entitlements, and the outcome depends on the creditor.

An adviser will advocate with third parties on your behalf only with your express permission, which can be withdrawn at any time²⁸. That is the boundary: an adviser can negotiate, prepare letters and explain your options, but cannot force a creditor to accept a plan, cannot stop a creditor taking court action, and cannot make a debt disappear. Free, confidential and independent advice is available from a debt adviser if you owe money to HMRC, and the same principle applies across debts²⁹.

What an adviser cannot do is also worth knowing from the other side. Debt Justice, for example, cannot provide debt advice and recommends getting in touch with free services instead³⁰. If you are looking for help on someone else's behalf, National Debtline publishes guidance for people worried about someone else's debts²³. You can help them find advice, but the adviser will deal with the person who owes the money.

There is also a rule that protects you from being steered. A firm must not enter into an agreement to receive, solicit or accept any commission, fee or other financial consideration from a debt solution provider in connection with referring customers to a debt solution provider, except as provided in CONC 8.3.14R³¹. That rule does not apply to a not-for-profit debt advice body, which is why charity advice is the safer starting point.

Priority debts and court action: rent, mortgage arrears and hearings

Not all debts are equal, and a refused offer on a priority debt needs faster action. Priority debts include mortgage or rent, service charge or ground rent, council tax, electric, gas, water, hire purchase goods, county court judgments, magistrate or court fines, and child maintenance⁷. Missed rent payments are known as arrears and are considered priority debts³². Rent arrears are always treated as a priority debt³³.

The consequences of not paying priority debts are the serious ones: losing your home through mortgage or rent arrears, action by enforcement agents, having your gas or electricity supply cut off or accepting an expensive pre-payment meter, or losing belongings on hire purchase such as a car or furniture³⁴. Common types of priority debt include missed payments to court fines, council tax, water bills, and your rent or mortgage³⁵.

Forbearance, where a lender agrees to hold off, is not an option with priority debts such as fines, court judgments or decrees, rent arrears, council tax arrears and child maintenance arrears³⁶. That is why a refused offer on a credit card is a different problem from a refused offer on rent.

If a mortgage or rent debt is heading to court, get advice before the hearing rather than at it. Shelter England updated its guidance on what to say to the judge at a repossession hearing on 16 September 2025, and its guidance on what happens when a lender sells your home on 27 January 2026³⁷. Where a creditor is not complying with a request for information about a credit agreement, the creditor cannot make you pay off your debt before you are supposed to, get a court judgment against you, or take back anything you have hired or bought on credit, or take anything you used as security³⁹.

Where this guide does not apply: Scotland and calls from abroad

The rules differ across the UK, and the guidance on refused offers is split accordingly. National Debtline's refused offers guide for England and Wales covers non-priority creditors such as credit cards, unsecured loans and overdrafts if they refuse to accept the payment offer you have made them¹¹. A separate version covers Scotland, and it states plainly that it covers Scotland and that you will need different advice if you live in England and Wales⁴⁰.

In Scotland, if you live there and took your debt out there, a creditor should not try to take action against you in another country, for example England⁴¹. Scotland also has its own protections. Under a moratorium, creditors cannot contact you to ask for payments or start or continue court action against you³⁶. And a debtor is not entitled to make an application for the approval, or the variation, of a debt payment programme unless the debtor has obtained the advice of a money adviser in relation to the debtor's financial circumstances, the effect of the proposed programme and the preparation of the application⁴².

Some National Debtline letters and guides are territory-specific. The letter complaining to debt collection agencies that you do not owe the debt is relevant in England, Wales and Scotland⁴³. The full and final settlement offers guide is not relevant in England and Wales⁴⁴.

If you are calling from abroad, the freephone number does not apply and calling is not free of charge²⁴. Webchat and My Money Steps remain available, and My Money Steps is open 24/7²².