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Interest

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All debts have two parts – the money borrowed, i.e. the ‘principal’ sum, and the interest. Interest is the charge for lending you the money. You will need to find out if interest is still being added to any of your debts.

When you make an offer of repayment to creditors, if this amount is less than the interest being added, your debt will continue to grow, and you won’t get anywhere in reducing the amount you owe.

You should ask the creditors to stop charging you any more interest. See our example letter to secondary creditors.

If some creditors refuse to stop interest, but other creditors agree, mention the names of the creditors who have agreed as a way of trying to persuade those refusing to reconsider. If you cannot reach an agreement with your creditors, then phone us for advice.

 

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