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Write offs
What is a Write-off?
A write-off is where, at your request, your creditors agree to cancel any debts so that you no longer owe them anything.
Asking your creditors to write off a debt is only likely to succeed if you can demonstrate to your creditors that any action they take to enforce the debt would result in failure (e.g. you do not have any available income, savings, or other capital of any value), and that your situation is unlikely to improve anytime in the future. This could be due to long-term financial difficulties relating to an illness, unemployment, retirement or old age, or living on a low income.
Creditors are more likely to agree to writing off a debt if they have been pursuing the debt without success for a long period of time. If your debt is fairly recent, you may have to consider adopting an alternative strategy first, such as asking the creditor for a period of non-payment (Moratorium) for three to six months, and combining this with requesting a write-of after this period has elapsed.
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| Alternatives to a write-off...
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How do I ask my creditors to write off a debt?
We strongly recommend that you seek professional advice when asking your creditors to write off a debt. A professional debt adviser can help you to negotiate a write off with your creditors, and can help you to draft a suitable letter. However, you may find the following information helpful:
You should approach your creditors in writing (you should also request that your creditor replies in writing). This will help you to state your position clearly and concisely, and by using a formal approach will often stand a much greater chance of being accepted.
You will need to describe your circumstances carefully, and you should clearly point out to your creditors that you have no property or goods of significant value, no or very little income except from state benefits, and that your situation is unlikely to improve in the foreseeable future.
If you succeed in getting a creditor to agree to writing off a debt, you should ensure that you get them to confirm it in writing. If you don’t, the creditor may start to pursue you for the debt again at a later date (especially if your situation improves) and you will have no formal agreement to show that they agreed to write the debt off in full. When the debts are written off, you should ask your creditors to show them as ‘settled’ or ‘satisfied’ with the Credit Reference Agencies. A ‘settled’ or ‘satisfied’ debt is less than damaging to your ability to obtain credit again in the future (should you need to), than an outstanding debt.
What are the advantages of a Write-off?
The advantages of requesting a write-off include:
- Once the debt has been formally written off (e.g. you have written confirmation), you will no longer owe your creditors anything
- If the debt is formally written off, the stress and anxiety often related to being in debt is taken away, and you can make a fresh start
What are the disadvantages of a Write-off?
The disadvantages of requesting a write-off include:
- Your creditors will want to be completely satisfied that you have absolutely no ability to repay them, either now or in the future, before they will agree to writing off any outstanding balance
- It can be difficult to get your creditors to formally agree to writing debts off, particularly if the debt has been incurred recently. Creditors will almost never agree to write a debt off on the first attempt
- Some creditors may prefer to freeze the debt, rather than write it off, in the hope that your circumstances improve and your income increases
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