If you cannot make immediate payment of a whole debt, make sure to detail your offer to pay off the debt by regular fixed instalments with this letter proposing payment in instalments. You can also use this application for instalment payment to try and stop creditors from taking further action against you. Thoroughly outline the details of your proposal to pay in instalments so that creditors are confident in your ability to repay your debt.
When should I use a letter proposing payment in instalments?
Use this letter proposing payments in instalments when:
- you or your organisation are sure that you owe someone some money
- payment of the whole debt cannot immediately be made
- you want to stop the creditor from taking further action against you
What's included in a letter proposing payment in instalments?
This letter proposing payment in instalments covers:
- the offer to pay off a debt by regular fixed instalments
What's a letter proposing payments in instalments?
A letter proposing payments in instalments is an offer by the debtor to pay off an outstanding debt by regular fixed amounts over a period of time.
Do I need a letter proposing payment in instalments?
A proposal to pay in instalments will help to set out your financial ability to pay off a debt and avoid the need to go to court.
Why should I consider a letter proposing payment in instalments?
If you accept that you owe money to an individual or company but you currently don't have the financial resources to pay off the outstanding debt immediately, then you may offer to want to pay in instalments. This will show good intention and willingness to pay off debt and can stop a creditor from taking further action. It can also help with your cash flow, especially if you're a business.
Is this a formal legal agreement?
This letter proposing payment in instalments is merely an offer and does not constitute a legal agreement. If the creditor accepts your offer through a Letter accepting payment in instalments, then that agreement will be a formal legal agreement.
How often should I make repayments?
You can choose to make repayments either weekly or monthly depending on your financial situation.
Should I include a request to freeze interest?
You can choose to make a request to the creditor to freeze any interest, however, the creditor does not have to accept this request. This will depend on your relationship with the creditor and the strength of your bargaining position.
Should I include a request to consider good credit history?
You can choose to make a request for the creditor to consider any good credit history you have. This will help assure the creditor of your ability to meet the repayments on time and give you a stronger position when proposing payments in instalments.
What if the person I owe money to rejects my letter proposing payment in instalments?
It may be that the creditor isn't satisfied with the terms of the proposal. If this is the case, you should consider negotiating with the creditor and trying to come to an arrangement that works for both parties.
What if I can't pay the instalments on time?
If you think you're going to struggle to pay off a debt through an instalment plan, you should consider contacting the National Debtline, which is a free and impartial service to help those who are struggling with debt and finances.
Ask a lawyer for:
- a debt claimed against you where the amount is incorrect
- disputes about whether you owe the debt
- advice on defending debt proceedings
- advice on your legal rights under a contract.
This letter proposing payment in instalments is governed by the law of England and Wales or the law of Scotland.