The Best Ways to Get Creditors to Listen

How to Get Your Creditors to Listen to Your Concerns

Often you take out debt with the best of intentions, believing that you can pay it back.

Sometimes, though, your circumstances change, and you find yourself unable to meet your monthly obligations.

When this happens, creditors get nervous and start sending you letters asking for money.

Eventually, they start phoning you (or your employer) and threatening legal action to get their money back.

And that’s when things start to get worrying.

Nobody wants to fall behind on payments, but it is something that can happen.

Need Help Reviewing Your Financial Situation?
Contact a Licensed Trustee for a Free Debt Relief Evaluation

Call 877-879-4770


How things play out depends on the kind of debts that you hold.

If your obligations are secured against your home or car, then creditors may try to seize those assets and sell them to recoup their losses.

If you have unsecured losses, lenders may attempt to repossess valuables, such as investments you hold, cars and vehicles, collectibles, antiques, and even works of art.

For many people, this is a worrying prospect.

The rules on what creditors can and cannot do vary from province to province, but their rights are extensive.

If you owe them money and don’t get help from financial counsellors, they can carry out the terms stated in the original lending agreement, including taking possession of your assets.

The consequences of making late payments can be extensive.

If you owe money to a financial institution, they may offset fees by garnishing cash from other accounts or your investment products.

Similarly, if you have any joint debts with family or friends, lenders may begin pursuing your cosigner or guarantor for the money you owe.

This type of action can lead to relationship problems and high levels of stress.

People fall into financial difficulties for all sorts of reasons.

Some go into debt because they mismanage their money, spending too much on luxuries, without considering whether they can afford it.

Others, however, are unlucky.

Divorce, unemployment, separation, illness, injury, and business failure can contribute to a shaky financial position.

In all likelihood, you never intended to go into debt.

Instead, circumstances conspired against you, and now you’re in a position you never expected.

Creditors are calling you demanding money, but you can’t afford to pay them, at least, not yet.

When money problems strike, you need to approach creditors to tell them about your change in circumstances.

Unfortunately, getting them to listen can be a challenge.

Usually, creditors don’t want to negotiate.

From their perspective, you signed a credit agreement, and you should fulfill it.

It seems like there is very little wiggle room.

It turns out, though, that you have more options than you might imagine for reducing your debts, postponing repayments, and improving your financial situation.

The following is a strategy you can follow to get back on the road to financial health and reduce debt repayments.

Write A Debt Repayment Plan Letter To Your Creditors

If you know you’re in financial difficulty and unable to pay the money you owe, you should talk to your creditors about your situation as soon as possible.

If you don’t, they will continue to attempt to collect payments via whatever means necessary.

Writing a debt repayment plan letter is the first step towards getting out of a sticky financial situation.

Here you provide your creditors with sufficient information about your circumstances so that they can see your difficulties and offer concessions.

The letter should include the following information:


  • Your total income from all sources, including wages, pensions, and dividends;
  • Your total debt expenses, including all your unsecured debt, like credit cards and personal loans;
  • How much you think you can reasonably afford to pay going forward, given your family situation;
  • An apology for being unable to meet current repayment demands;
  • A legitimate reason for why you’re unable to repay the money you owe;
  • Your active plans for securing additional income or reducing your expenses to pay down the debt.


All Canadian provinces have a statute of limitations in place to limit the amount of debt that collectors are allowed to obtain.

In many areas, creditors cannot legally extend liability beyond ten years.

Ontario, Alberta, and Saskatchewan have a two-year limit on civil proceedings against you.

In New Brunswick, P.E.I. and British Columbia, it is six years.

In Quebec, it is three.

Include Reasons For Financial Difficulty

You will need to state your reasons for financial difficulty in your letter to your creditors.

This information helps them understand your situation and encourages them to make concessions.

While they are looking to make a profit, most still want to treat their customers fairly.

If you’ve fallen on hard times, they usually understand.

Legitimate reasons for why you’re unable to pay them at this time include:


  • Confirmation of a change in marital status. Creditors know that divorce can be a costly financial process. When you borrowed, you believed that you had the financial security to make all repayments set out in the contract. But as you went through divorce proceedings and split assets with your ex-spouse, you encountered high costs and can’t make necessary payments right now.
  • Proof of change in employment status. Changes in work beyond your control can adversely affect your capacity to repay your debts. Again, when you took out loans with creditors, you both agreed that you had sufficient income to repay the loan. But termination, reduction in employee benefits or changes to your hours may have rendered the original agreement infeasible.
  • Confirmation of a change in your health situation. Health can dramatically impact your ability to work and generate income. If you have to take sick leave or have a disability, you may not be able to earn as much money as you could before. You should, therefore, include a letter from your doctor in your correspondence, explaining your new medical circumstances and how they affect you financially.


If none of these apply to your situation, do not worry.

Even if you haven’t experienced adverse changes in your circumstances, you should still provide a compelling reason for your current financial difficulties.

If you are not sure how to do this, a credit counsellor can help.

They will consult with you about your current situation and recommend a course of action based on the information you provide.

Create A Budget Statement

Once you have a reason for your financial difficulties, you will need to create a budget statement.

The purpose of this is to show the proportion of your monthly income that goes towards essential expenses and maintenance.

If you are a single professional sharing a household with other people, your essential expenses will be low.

Your outgoings might include rent, utility bills, grocery shopping, medical bills, and vehicle costs.

If, however, you are a parent living with dependents, then your costs will be higher relative to your income.

Thus, your capacity to repay debts with disposal income will be lower.

Your goal in this part of the process is to demonstrate that you cannot reasonably make payments as they currently stand and require some form of relief.

Request Creditors Communicate With You In Writing Only

Receiving phone calls from creditors is stressful and, often, counterproductive.

It is your right to request that they communicate with you only in writing.

Mention this in the letter and ask them to stop making phone calls.

State When You Will Repay The Money You Owe

Creditors will still want to know how you plan to repay the money you owe.

Whether you can or not will depend considerably on your circumstances.

If you cannot pay right now because of medical bills but are expecting an insurance payment soon, then tell them when this will come through and promise to pay when it does.

Ensure that you follow through on your obligations.

Creditors will resume action against you if you don’t.

Send Your Letter To Creditors

The final stage is to send the letter to your creditors, either by post or email.

Make sure you include all the details above.

Make sure that you send the right letter to the right creditor.

Also, ensure that two lenders are not asking you for the same outstanding debts.

If you are not sure precisely how to construct a letter, you may want to use a sample letter to creditors.

These are professionally-written documents that provide a template for you to fill out.

In general, there are three types of letters that you might want to write.

A reduced payment ability letter is one in which you request smaller repayments.

A debt forgiveness letter is for when you find yourself unable to repay your debts, and the situation is unlikely to improve.

And, finally, a letter outlining your inability to make payments describes how you can’t pay your creditors right now, but you may be able to in the future.

If you are unsure how to write a compelling letter, or get creditors to listen to your situation, speak with a credit counsellor.

They can instruct you on the best course of action and provide helpful advice in your time of need.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

Need a Licensed Insolvency Trustee?

Licensed Insolvency Trustees Near Me

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.