The direct negotiation route
You can contact each creditor individually to explain your circumstances and propose reduced monthly payments.
Use the Standard Financial Statement (SFS) as your budget — it is the UK-wide standard that creditors expect to see. Free tools are available from StepChange and MoneyHelper.
Include: total income, essential outgoings, other debts and their payments, and the amount you can afford for this creditor pro rata.
What creditors typically do
Most mainstream creditors will accept a pro rata reduced payment for 3-6 months in the first instance, then review.
Some will freeze interest. Some will not. Freezing is voluntary at this stage.
For payment plans over 12 months, formal DMP or IVA usually works better than direct negotiation because it is more structured.
Getting agreements in writing
Always get any agreed reduction in writing before you change payments. A phone agreement can be denied later.
Keep records of all correspondence.
Credit file impact
Reduced payments will show on your credit file as partial or missed payments, depending on how the creditor codes them. This affects your credit score for six years from the date they start.
This is the same impact as a DMP — direct negotiation with reduced payments has broadly the same credit file effect as a formal DMP.
When direct negotiation is appropriate
Small number of creditors (2-4).
Short-term difficulties (3-12 months).
You want to stay in control.
Creditors are known to be reasonable.