Introduction

Use this free MoneyNerd letter template to ask a creditor to hold action on your account during the COVID-19 pandemic. 

Creditors typically agree to hold action on an account by not enforcing payments or adding interest when someone is first told they have a debt. This is so they can seek debt advice and work out how they will repay. But companies and lenders are now holding action on account during the pandemic to help individuals and couples seek advice as their finances change. 

Download our free letter template to ask for your account to be held and the debt interest frozen. All you will need to do is add some details so the creditor can identify you. It will save you time and worry!

Letter Template

To Whom It May Concern

Regarding Case #: [your case number]* (required)

As a result of the impact of COVID-19 (Coronavirus) my circumstances have changed and are likely to continue to change at the moment. I may need to get further advice on my long term solutions for dealing with my debts once I am able to complete an accurate budget.

Therefore I would like to request [a payment holiday/that you hold action and freeze interest and charges]* (required) on the above account.

I will be in touch as soon as I am able to work out the best long term debt solution for my circumstances.

Thank you for your understanding and I hope to hear from you soon.

Yours sincerely


Downloadable Resource

The download links below take you to a Google document template where you can make a copy or save in any document format you like. Note, you may have to login to your Google account.

Download – Single (for one person)
Download – Joint (for couples)

What is a COVID payment holiday?

A COVID repayment holiday is when a creditor agrees to pause all of your repayments while you reassess your finances during the COVID-19 pandemic. 

Many people have had their income reduced or even lost jobs because of the pandemic, meaning they cannot make the repayments they agreed to in previous repayment plans. If this sounds like your situation, you could request your creditor to hold action on your account.

You should then use this time to make a budget and work out what you can afford to repay in your new financial situation. 

What is a token repayment plan?

If the pandemic has caused you to lose all or most of your income, leaving you with no money to make significant repayments on loans or credit cards, you could offer a token repayment plan. This is a repayment plan of £1 per month until your financial situation improves (hopefully as we leave the pandemic behind).

During a token repayment plan, you can get further debt advice and freeze interest on the debt so it doesn’t grow bigger while you seek help. 

Do creditors have to hold action on your account?

Creditors usually have to hold action on an account when the debtor has just found out they owe the debt and are getting debt advice. This is written in the codes of practice of many organisations that the biggest lenders are members of. Smaller companies that are not members of these organisations do not have to agree to hold action on your account.

Because COVID-19 was an unforeseen circumstance, the same organisations as well as the Financial Conduct Authority are asking consumer credit providers to be understanding of people’s finances during the pandemic and offer to hold action on accounts. 

Do payment holidays affect my credit score?

If you plan on taking out a new loan or mortgage in the next few years, you might be wondering if holding action on your account because of the pandemic or taking a payment holiday will affect your credit rating. The good news is it will not. 

You can request action to be held on your account and not have to worry about your credit file. 

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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