Step 4 Dealing with your non-priority debts

What if I have no money left to pay my creditors?

No payments or token payments

After paying your outgoings and making arrangements to pay your priority debts, there may be nothing left to pay other creditors. If you have nothing left, say so. Show your creditors by sending them Your budget and a letter to back this up. Ask your creditors to hold action until your circumstances improve. This is called asking for a ‘moratorium’. If you prefer, you could offer a token payment of £1 a month to each creditor instead.

Token offers or no offer of payment sample letter


If you owe a lot of money and you cannot see a way out of your debts, bankruptcy might be a good option for you. You should consider going bankrupt if you have no assets or you are prepared to lose your assets and possibly your business.

See our fact sheet:


You must owe £3,000 or more before a creditor can make you bankrupt (although two or more creditors can club together and apply to make you bankrupt). Non-priority creditors are less likely to make you bankrupt than priority creditors because it costs them money in fees and costs.

They will probably not recover the debt and the costs of making you bankrupt unless you have assets that can be sold to pay your debts.

Once you are declared bankrupt, your creditors can usually take no further action against you. Going bankrupt can have important effects, particularly if you own your home and it is worth more than the mortgage you have left to pay. In this case, your home could be sold as an asset. Being made bankrupt could also affect your ability to carry on being self-employed. Bankruptcy may also affect you if you are a paid employee, if your contract of employment does not allow you to become bankrupt.

You can make yourself bankrupt if you meet certain criteria, but you have to pay a fee. Your bankruptcy will normally last for six months or one year, depending upon how you went bankrupt. After this, debts that have not been paid are usually written off and you are discharged from the bankruptcy. You may still have to make monthly payments for a total of four years under the terms of your bankruptcy order. If a creditor has threatened to make you bankrupt, or you think it may be an option for you to consider, contact us for advice.

See our fact sheet:


Extra advice:


If you are a partner in a partnership you will need consider whether you should make your partnership bankrupt we well as making yourself personally bankrupt. There are different fees to pay and forms to complete if you are applying to make your partnership bankrupt. Contact us for advice.


Will my creditors write off my debts?

If you have no money for creditors and no assets, creditors may agree to write off your debts. This is very rare but may be an option if your circumstances are extremely difficult due to illness, age or a death in the family. You will need to give your creditors evidence of your circumstances.

Write off the debt sample letter