Negotiated Agreement
with Creditors

Learn more about a negotiated
agreement with creditors

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What is a negotiated agreement with creditors?

You contact your creditors and negotiate an agreement to repay all or some of the debts. Negotiated agreements may involve either or both of these:

  • Payments from your income
  • Payments from lump sums you receive, for example from an inheritance or from relatives

Your creditors may be prepared, at the start or later, to agree to write off part of what you owe them. If they do so, they should confirm this agreement in writing.

Payments from income

You need to work out how much you can afford to repay, after allowing for your essential household and personal spending such as mortgage or rent, heating, utilities, and housekeeping. You should offer to share any extra income among all your creditors, based on the amounts you owe them.

This means that all your creditors are offered their share of what you can afford. You should also ask your creditors to freeze any interest or charges. Your creditors will expect you to give them regular updates of your income and expenditure so that they can see whether you can increase your payments.

Payments from lump sums

You may make payments towards your debts from a lump sum you receive and which your creditors may agree to accept in settlement of what you owe – that is, they agree to write off the balance they are owed.

However, if you do have extra income after paying your everyday expenses, they may expect you to make at least some payments from that as well.

If you can’t make payments temporarily, for example because of a short-term illness, creditors may agree to accept no payments or token payments of say £1 a month, but only for a limited period.

Benefits and Considerations of an negotiated agreement

Benefits of an negotiated agreement

  • Fair way of sharing payments that is widely understood by creditors
  • You can ask your creditors to accept reduced payments if your situation worsens or you face some unexpected essential spending
  • You do not need an advice agency to negotiate with your creditors and can do it yourself. You can create your own budget and make offers to creditors based on this. If you wish you can ask an advice agency to help you with budgeting
  • Creditors may be prepared to write off the balance of what is owed if you have shown commitment to repay as much as you can and have maintained regular payments
  • There is no fee to pay

Considerations of a negotiated agreement

  • Creditors may refuse to agree with your offer but they can’t refuse any payments you make to them
  • Creditors may refuse your offer unless it is made through an advice agency that has independently reviewed your circumstances
  • Creditors are able to take legal proceedings against you at any time. This can include continuing to obtain county court judgments, a third party debt order or a charging order against your property; even when you are making every effort to pay
  • Having a charging order on your home means that if you don’t repay the debt the creditor has a claim on the proceeds if the property is sold
  • If you can only afford small payments these may not be enough to cover the interest and charges and your debts will continue to increase

Other Debt Solutions


Debt Relief Order (DRO)

Debt Management Plan (DMP)

Individual Voluntary Arrangement (IVA)

Debt Consolidation

Administration Order

This page is for informational purposes only. At UK Debt Service we specialise in Individual Voluntary Arrangements (IVA), which is an alternative debt solution to a negotiated agreement with creditors.

This page is for informational purposes only. At UK Debt Service we specialise in Individual Voluntary Arrangements (IVA), which is an alternative debt solution to a negotiated agreement with creditors.

We're here to help people get debt free

At UK Debt Service we specialise in Individual Voluntary Arrangements (IVAs) and help people become debt free.

Our advisors are here to listen and help you understand the options available based on your individual circumstances and see if an IVA is the most appropriate solution.

Start your journey towards a debt free future today and see if you qualify for an IVA.

Speak to a debt help expert now on 0330 320 0827 or complete the form and we will call you back.

Debts we can help with

We can help with unsecured debts including the below and more

Council Tax Arrears, HMRC debt & benefits overpayment
Payday loans, bank loans & overdrafts
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UK Debt Services specialises in IVAs, but we will always review your circumstances and let you know all debt solutions available so you can make an informed decision.