No money to pay creditors - letter

This advice applies to Scotland. See advice for See advice for England, See advice for Northern Ireland, See advice for Wales

You can use this letter when you have no money available to offer to your non-priority creditors. You can use the Budgeting tool to work out your budget and to see whether you have money available to pay your non priority creditors.

This template is to be used for guidance and may not suit your specific situation. If you require more detailed advice and guidance, you can get more help.

If you need more help on using this tool, or you want to read about circumstances when you might use it, see Guidelines for using the letter templates.

Check if your creditor can still take action against you

Your creditors have a limited time to take you to court to repay a debt. For most debts, the time limit is 5 years. The time limit might restart if you write to your creditor or make a payment. If it’s a joint debt, this includes if the other person makes a payment. 

If you haven’t got court papers after 5 years, your debt becomes ‘extinguished’. This means your creditor can’t usually take court action to get their money back - but some creditors might try to argue against this.  

Don’t use this letter if:

  • it’s been over 5 years, because they might not be able to force you to pay

  • it will soon be 5 years, because contacting them might restart the time limit.

Check if the time limit has passed or will pass soon. If you’re not sure, talk to an adviser.

Sam Hoolin

8 Park Avenue

01632 960001

Giltham City Bank

24 Station Road
GT16 3LP

17 July 2024

Your reference: LL/ANO/Reminder1

To whom it may concern,

Account name: Sam K Hoolin

Account number: 12345678

I am sorry that I am unable to keep up my monthly payments to your company.

I'm sick and unable to work. I've claimed benefits and I'm waiting to hear the outcome of my claim. My situation is unlikely to improve for at least 3 months.

I enclose a copy of my financial statement. This shows income and expenses for me. You will see from this information that I am unable to make any offer of payment at the moment.

I am making every effort to increase my income and will contact you again as soon as my financial circumstances improve.

In the meantime, it would be helpful if you could hold action on my account and agree to freeze interest and other charges to stop my debt increasing. If you are unable to agree to this, please explain your reasons.

Thank you for your help and I look forward to hearing from you.

Yours faithfully,

Sam Hoolin

Page last reviewed on 17 March 2021