Hardship Payment

A reduced payment accepted from a debtor who is experiencing financial hardship, typically agreed through negotiation with the creditor or enforcement agent. Hardship payments recognise that enforcing the full amount immediately would cause disproportionate difficulty for the debtor.

In practice

Enforcement agents often encounter debtors who cannot pay in full but can afford modest regular payments. A hardship payment plan may be agreed informally, or the debtor can apply to the court for an instalment order at a reduced rate. Debtors should seek free debt advice before agreeing to any payment plan to ensure it is genuinely affordable. Creditors may accept reduced payments to avoid the cost and uncertainty of further enforcement action.