Introduction

If you made a token offer as a sign of goodwill to a creditor and they rejected it, you can ask them to reconsider their decision with this letter template. We have carefully written a letter to ask creditors to reassess their decision and make them aware that they are not likely to recover any money beyond the token offer due to financial difficulty. 

Download this free letter template below, add your account details and send it off. Hopefully, they will reconsider and accept your token payment plan. We have a template for people with solo debts and for those with joint debt accounts. 

Letter Template

To Whom It May Concern

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

I refer to my recent letter and your reply regarding the above account.

I am disappointed that you will not accept my offer of payment. I carefully considered my financial situation before I made my offer to you. As I have no available income, I have offered you a token payment as a gesture of goodwill.

If I offered you a higher amount, it would be unfair to my other creditors. Also, I cannot afford to pay any more due to my current circumstances.

I have sent all of my creditors a copy of my budget summary and [all, most or insert the number who have]* (required) have so far accepted my offer of payment.

If you sue me in the County Court, I would continue to offer this amount and I am confident it would be accepted by the court.

I would therefore be grateful if you would reconsider your reply to the above offer.

I look forward to hearing from you.

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 token payment plan?

A token payment plan is a proposal to pay £1 per month to your creditors when you do not receive enough money to cover your essential expenses and pay back a debt. It is a sign of goodwill from the debtor to acknowledge they cannot pay the debt back at this time but they can pay something. 

Token payment plans are not used as long-term debt solutions. Creditors agree to these low repayment plans with a long-term vision that your finances will improve and you will be able to repay more each month in the future. The token payment is usually accompanied by an offer to freeze interest so the debt doesn’t grow bigger during this time. 

How long can you make token payments for?

Most token repayment plans last for around six months. This is judged to be enough time to help you improve your finances, either by paying off other debts or finding employment. However, there is no set time period you are allowed to make token repayments. It is down to your creditor to accept or reject the proposal. 

Do creditors have to accept token payments?

Creditors are not legally obliged to accept token repayments. They can reject or accept them as they please. However, codes of conduct from popular finance organisations request that their members are sympathetic and understanding of people’s difficult financial situations. This means many creditors will accept token repayments. Some will reject the proposal at first and then accept it if you are persistent.

This is why we have created a letter template asking creditors to reconsider a token repayment decision. 

Do token payment plans affect my credit score?

Token repayment plans mean you are paying less back than you initially agreed to when taking out a loan, credit card or other types of consumer credit. For this reason, underpayments will be recorded on your credit file and will harm your score. You will probably have trouble getting more credit in the years after you use a token repayment plan. 

What if a creditor rejects my token payment offer?

If a creditor rejects your first offer of a token repayment plan, get them to reconsider their decision with our free letter template. We discuss how the courts are likely to agree that the token repayment is the best solution right now. 

Download our letter template for free, today!

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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