Can a Creditor Refuse to Accept any Payment on a Debt?

by Russell Huebsch ; Updated July 27, 2017

It may sound illogical, but creditors frequently refuse payments on a debt. This is not necessarily because the creditor wants to keep you in debt, but usually because of company policy. If a creditor refuses a payment, you are not free of the debt. Instead, you should talk to the creditor about payment requirements.

Identification

A creditor can refuse payment on a debt. This typically occurs when you use a payment method not accepted by the lender, such as a personal check when the creditor only accepts certified funds. Creditors frequently reject partial payments, because they do not want borrowers to habitually send in partial payments in lieu of the required monthly minimum. This would require additional administrative work.

Effect

A creditor refusing to accept payment on a debt does not absolve you of the legal liability to pay it. However, the creditor usually cannot add interest and fees unless your contract stipulates that you must pay using a certain method. The creditor may cancel a portion of your debt if you make a partial payment to settle the debt.

Warning

You should save a record of any attempt to pay a creditor. If the creditor later sues you, you need to prove that you made a good faith attempt to pay the debt. This also might help if you want to discharge the debt in bankruptcy. Monitor the debt balance so you can detect any interest and fees the creditors tries to charge illegally.

Tip

When a creditor refuses to accept a payment on a debt because the payment is too small, set up a personal account for the debt and keep adding money to it until you can pay off the balance or make a minimum payment. If you plan to make a partial payment, call the creditor beforehand to get approval for the amount and/or method of payment.

About the Author

Russell Huebsch has written freelance articles covering a range of topics from basketball to politics in print and online publications. He graduated from Baylor University in 2009 with a Bachelor of Arts degree in political science.