Requesting Payment in Instalments from a Creditor in Ireland
When a debt cannot be paid in full at once, a debtor may ask the creditor to accept payment in instalments. This guide explains what such a letter should contain, including acknowledgement of the debt and a realistic repayment proposal, and provides a ready-to-use template.
Why write an instalment request letter
A debtor who is unable to settle an outstanding sum in one payment can approach the creditor directly and propose a structured repayment plan. A written, dated letter that clearly acknowledges the debt and sets out a concrete offer is far more likely to be accepted than a verbal request, and it creates evidence of the debtor's good faith should the matter later come before a court.
Acknowledging the debt in writing is also relevant where enforcement steps are contemplated. Court procedure recognises that a creditor who has obtained a judgment may seek to recover the sum due, including through attachment of debts owed to the debtor by a third party, as provided for in the Rules of the Superior Courts, Order 45, rule 1. A debtor who proactively proposes instalments before matters reach that stage retains more control over how the debt is repaid.
What the letter should contain
- A clear acknowledgement of the debt: the amount, the origin of the debt, and (where relevant) the date of the original agreement.
- The amount of credit originally advanced and the amount presently outstanding, mirroring the kind of information a lender itself is required to state in instalment schedules, such as the amount of credit advanced and the amount of each instalment referenced in forms under the Consumer Credit Act 1995 (Section 129) Regulations 1996 and the Consumer Credit Act 1995 (Section 36) Regulations 1996.
- A concrete proposal: the number of instalments, their frequency, and the amount of each instalment.
- Reference to interest, if the underlying agreement provides for it, and an acknowledgement that the applicable interest rate or annual percentage rate of charge continues to apply to the outstanding balance.
- A request for written confirmation from the creditor that the proposed arrangement is accepted, together with a commitment to keep to the plan.
- Contact details for further correspondence and, where useful, supporting information about the debtor's financial situation.
What to offer and how much detail to include
The passages available do not prescribe a fixed statutory formula for what a debtor must offer a creditor by way of instalments; this is a matter of negotiation between the parties. As a matter of practice, an offer should be realistic and sustainable, reflecting what the debtor can genuinely afford each month or week, rather than an amount designed only to delay matters.
Where the underlying debt arises from a regulated credit agreement, the creditor itself will already be familiar with instalment-based repayment structures, since such agreements are commonly documented using forms specifying the number and frequency of repayment instalments and the amount of each instalment, as reflected in the Consumer Credit Act 1995 (Section 36) Regulations 1996 and the Consumer Credit Act 1995 (Section 129) Regulations 1996. A debtor's proposal can usefully mirror that structure: total amount owed, number of instalments, amount per instalment, and frequency of payment.
Where the debt relates to a mortgage credit agreement, a creditor assessing any revised arrangement is required to have carried out a thorough assessment of the consumer's creditworthiness before concluding the original agreement, under the European Union (Consumer Mortgage Credit Agreements) Regulations 2016, Regulation 19. This context can be referred to if relevant, though it does not itself dictate the instalment amount to be offered.
The exact interest rate applicable to a specific debt, and any deadline for responding to a demand, will depend on the particular contract or, in default, on general law; the passages here do not settle those points, so readers should check the original loan agreement or, where court proceedings are already in train, the relevant court rules and confirm current requirements before finalising an offer.
What happens if the creditor refuses or the debtor defaults
If the creditor does not accept the proposal, or if the debtor later fails to keep to an agreed instalment plan, the creditor may pursue recovery through the courts. Once judgment has been obtained, enforcement mechanisms include an application to attach debts owed to the debtor by a third party, made on an ex parte basis supported by affidavit, under the Rules of the Superior Courts, Order 45, rule 1.
Where a partner's interest in partnership property is at issue, a judgment creditor may also apply for a charging order, and such applications must be made by motion served on the judgment debtor and other partners within the jurisdiction, as set out in the Rules of the Superior Courts, Order 45, rule 3. These provisions illustrate why an early, clear written instalment proposal is generally in the debtor's interest, as it may avoid the escalation to formal enforcement.
Step-by-Step Guide
- Gather the facts: confirm the exact amount owed, the date and origin of the debt, and any interest terms in the original agreement.
- Assess what can realistically be paid each month or week, and prepare a specific instalment proposal (amount, frequency, number of instalments).
- Draft the letter, clearly acknowledging the debt, stating the proposal, and requesting written confirmation of acceptance.
- Send the letter by a traceable method (registered post or email with delivery confirmation) and keep a copy for your records.
- If no response is received within a reasonable time, follow up in writing and consider seeking independent advice before matters proceed to enforcement.
Instalment Request Letter (Repayment Plan Proposal)
[Your Full Name] [Your Address] [Your Email Address / Phone Number] [Date] To: [Creditor's Full Name / Company Name] [Creditor's Address] Re: Acknowledgement of Debt and Proposal for Repayment by Instalments Account / Reference Number: [Account or Reference Number] Dear [Creditor's Name / Sir or Madam], I am writing regarding the outstanding amount of € [Total Amount Owed] which I owe to you arising from [brief description of the debt, e.g. "loan agreement dated [Date]" or "unpaid invoice number [Number] dated [Date]"]. I acknowledge this debt in full and confirm that the amount presently outstanding is € [Outstanding Amount], [including / excluding] interest accrued to date of € [Interest Amount, if applicable]. Due to [brief, honest explanation of circumstances, e.g. "a temporary reduction in income" or "unexpected medical expenses"], I am not in a position to discharge this debt in a single payment. I am, however, committed to repaying the full amount owed and wish to propose the following repayment plan: - Number of instalments: [Number] - Frequency of payments: [Weekly / Monthly / Other] - Amount of each instalment: € [Amount] - First payment date: [Date] - Method of payment: [Bank transfer / Standing order / Other] I would be grateful if you would confirm your acceptance of this proposal in writing. Should you require further information about my financial circumstances in order to assess this proposal, I am happy to provide it. I would ask that no further recovery steps be taken while this proposal is under consideration, and I undertake to keep strictly to the agreed schedule once confirmed. Please contact me at the details above if you have any queries or wish to discuss alternative terms. Yours faithfully, [Your Full Name] [Signature, if sending by post]
Sources from the Europaius Corpus
Frequently Asked Questions
Is a creditor obliged to accept an instalment proposal?
No general obligation to accept a specific instalment proposal appears in the provisions reviewed here; acceptance is a matter of negotiation. A clear, realistic written offer improves the chances of agreement.
Should I acknowledge the debt in writing even if I cannot pay immediately?
Yes. A clear written acknowledgement, together with a concrete repayment proposal, demonstrates good faith and provides a documented record of the arrangement being proposed.
What happens if the creditor already has a court judgment against me?
Where judgment has been obtained, the creditor may apply to attach debts owed to you by a third party, made ex parte on affidavit, under the Rules of the Superior Courts, Order 45, rule 1. Proposing instalments promptly may help avoid this step.
Does interest keep accruing while I am repaying by instalments?
This depends on the terms of the original agreement. The passages reviewed do not set a general interest rule for informal repayment plans, so you should check the original contract and confirm the current position with the creditor or an advisor.