Creditor Acceptance


This article explains why creditors usually accept debt management plans and also agree to other types of debt management solutions.


Many people who get into debt worry that their creditors will reject any kind of reduced payment. Rejection is unlikely if you get expert debt advice and offer to repay what you can afford.


Debt problems are sadly inevitable, so the regulator (and the lending industry itself) sets rules and standards about how lenders should react when people get into arrears.


Expert debt advice identifies the best debt solution and communicates with creditors to secure their agreement. Accepting a suitable debt solution is usually more profitable for a lender than refusing to provide their customer with help and support.


Debt Problems are Inevitable


Lenders understand that some borrowers will struggle to repay what they owe. This is priced into the interest rates that lenders charge.


The most common source of debt problems is a change of personal circumstances. Debt problems also result from bad lending and bad borrowing decisions.


Because it’s inevitable that some borrowers will get into financial difficulty, it’s necessary that fair solutions can be agreed between lenders and borrowers.


Regulation About Financial Difficulty


Consumer credit lenders are regulated by the Financial Conduct Authority.


The FCA sets rules about how lenders should deal with customers who get into financial difficulty. These rules are based around treating customers fairly and include the following statement,


“A firm must treat customers in default or in arrears difficulties with forbearance and due consideration.”


Lenders are required by their regulator to consider accepting a reduced payment from a customer who is in financial difficulty.


Lending Standards Board


Most major UK lenders are also members of the Lending Standards Board. This is an independent body that seeks to drive fair customer outcomes.


The LSB Standards of Lending Practice document states that,


“Firms should demonstrate an empathetic approach to the customer’s situation; listening to and acting upon information provided by the customer with a view to developing an affordable and appropriate solution.”


Debt advisers can help by providing information to lenders on behalf of the customer. This process aims to produce the type of affordable and appropriate debt solution described in the paragraph above.


Commercial Returns


As well as meeting their regulatory obligations, creditors want to recover the money that is owed to them.


Accepting a reduced debt management plan payment (that their customer can afford) could tick both of these important boxes. The lender steadily recovers what’s owed while adapting to meet the needs of their borrower.


Chasing debts is expensive, but an agreed debt solution reduces a lenders debt collection costs and delivers them a regular debt repayment. Accepting a debt solution can produce the best available commercial return for a lender in this difficult situation.


The Role of Debt Advice


Debt advisers build up a picture of your financial situation and can quickly identify whether you’re in financial difficulty.


If you’re in financial difficulty your adviser can effectively communicate this to your creditors.


Once a creditor understands the nature of your financial difficulty, they should be willing to accept a reasonable debt management solution.


There are several debt solutions that your debt adviser might recommend to you. These solutions apply in England, Wales, and Northern Ireland. If you live in Scotland click here.


Debt Management Plans


A debt management plan enables you to repay your debts at a rate that you can afford. A DMP continues until your debts are fully repaid.


Your DMP provider sends each of your creditors a detailed breakdown of your personal finances. Your creditors are informed about your income, your household bills, and your other general expenditure.


This financial information demonstrates to your creditors how much you can genuinely afford to pay towards your debts.


For both regulatory and commercial reasons, creditors are very likely to accept fair debt management repayment proposals. They’re also likely to freeze interest and other charges.




An individual voluntary arrangement (IVA) enables you to make affordable repayments for an agreed period of time (often five years). The debt that isn’t repaid gets written-off at the end.


Your IVA will get approved if less than 25% (by debt value) of your creditors object to it.


Consumer credit lenders make their IVA acceptance criteria available to insolvency practitioners. Your IP should therefore have a good idea in advance about whether your IVA proposals will secure creditor agreement.


For both regulatory and commercial reasons, creditors are highly likely to accept IVA proposals that meet their published acceptance criteria.




Creditor support is not needed if you apply for bankruptcy.


Debt Relief Order


Creditor support is not needed if you apply for a Debt Relief Order.


Debt Management Advice


For advice about debt management plans and other debt solutions please contact us.


Our friendly experienced debt advisers will guide you to effective debt solutions that your creditors are likely to accept.


We’re based in the Vale of Glamorgan near Cardiff and provide debt advice to customers who live in all parts of the UK.



Author: Andrew Graveson

Qualified Debt Adviser & Bright Oak’s Founder


Page Last Updated: 26/07/2020



Submitting Form...

The server encountered an error.

Form received.

Please fill in the form below. We will call you back as soon as possible.

Get Advice

Social Media

More Reading

Free-To-Client Debt Advice

The Money Advice Service provides details of organisations that offer free debt advice and services.

Debt Management Protocol logo link Brightoak Twitter

(c) Bright Oak Ltd. Company Number: 06774006. Data Protection Registration: Z1657982.

Telephone calls may be monitored or recorded. Authorised and regulated by the Financial Conduct Authority.

Bright Oak, Cardiff House, Priority Business Park, Barry, CF63 2AW. Tel: 02920 492661.

Debt Management Protocol logo link Brightoak Twitter


02920 492661

0800 0437222

Debt Management Protocol logo link Brightoak Twitter
Debt Management Protocol logo link Brightoak Twitter