Creditor holding letter
A holding letter asks a creditor to pause chasing or enforcement for a short, set period while your company takes advice and prepares a realistic proposal. It is a request, not a legal shield: the creditor does not have to agree, and it can still pursue the debt if it chooses. It works best when you are honest about the balance, give a clear date by which you will come back, and then actually do so. Use the template below as a starting point, keep it factual, and do not promise anything the company cannot deliver. If a statutory demand or a winding-up petition has already been threatened, a holding letter is not enough on its own and you should take advice at once.
The letter
Copy or download the wording below and replace everything in square brackets with your own details. Keep a dated copy of what you send and note any reply.
[Company name] Limited [Registered office address] [Creditor name] [Creditor address] Date: [date] Reference / account number: [reference] Dear [name, or "Sir or Madam"] Account [reference]: request to hold for [number] days We are writing about the above account. The company acknowledges the balance of [amount] and is not disputing that it is owed. [If you do dispute all or part of it, say so here instead and set out why.] The company is currently taking professional advice on its financial position and the best way to deal with its creditors fairly. So that we can do this properly and come back to you with a clear proposal, we ask that you hold any further action or enforcement on this account until [date, for example 14 or 21 days from now]. We are not asking you to write anything off. Our aim is to treat all creditors fairly and to put forward a realistic proposal for this account by [date]. We will contact you again by then, sooner if we can. If it would help, we are happy to discuss this by telephone. You can reach [name] on [telephone number] or at [email address]. Thank you for your consideration. Yours [faithfully / sincerely] ...................................... [Name] [Position, for example Director] For and on behalf of [company name] Limited
What a holding letter can and cannot do
A holding letter buys a little time and shows the creditor you are dealing with the position rather than ignoring it. It does not stop the creditor taking action, and it does not pause any court deadline. If the company owes several creditors, treat them fairly and consistently; favouring one over the others when the company may be insolvent can cause problems later. Our page on creditor pressure explains the wider picture.
When you need more than a letter
If the arrears are large, several creditors are chasing, or a statutory demand or winding-up petition has been threatened or served, a holding letter is not the answer on its own. At that point the useful step is advice from a licensed insolvency practitioner about whether the company can be rescued, or should be wound up in an orderly way. This template is general information, not advice, and a creditor is under no obligation to agree to it.
Related: dealing with creditor pressure, responding to a winding-up petition, HMRC Time to Pay letter, and company voluntary arrangements.
Creditor holding letter: common questions
Does a holding letter stop a creditor taking action?
No. A holding letter is a request, not a legal block. A creditor is not obliged to agree and can still pursue the debt, including issuing a claim or, in some cases, a statutory demand or winding-up petition. Many creditors will give a short period if you are realistic and keep to what you say, because an orderly proposal is often better for them than enforcement. Never treat a holding letter as a reason to ignore deadlines.
Should I admit the company owes the money?
Only admit a debt you genuinely owe. The template acknowledges the balance because that is the honest position for most accounts, but if you dispute all or part of it you should say so clearly and set out why, rather than acknowledge it. If a debt is genuinely disputed on substantial grounds, that changes your options, and you should take advice before responding, especially if a statutory demand or petition is involved.
What if the creditor has already threatened a winding-up petition?
Then a holding letter on its own is not enough, and time is short. A winding-up petition is a serious step that can lead to the company being wound up, and once it is advertised your bank will usually freeze the account. If a petition or statutory demand has arrived or been threatened, get advice from a licensed insolvency practitioner or solicitor straight away and see our page on responding to a winding-up petition.
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This is general information, not legal or financial advice. A holding letter is a request and does not prevent a creditor taking action. If your company may be insolvent, or a statutory demand or petition has been threatened, speak to a Licensed Insolvency Practitioner or solicitor. Last reviewed July 2026.