Informal Offers

Contents

Overview

How it works



(1) payments from your income

(2) payments from lump sums you receive (for example from an inheritance or from relatives).










How to calculate a pro-rata payment

When you have money to share between your creditors, i.e. disposable income left over after essential bills are paid, you will need to make sure that each non priority creditor is offered the right and fair amount. 


Work out how much to offer 



If you have any disposable income,  you can work out how much to pay each non priority creditor. This is known as a 'pro-rata' offer of payment. To work out how much to offer each creditor, do the following. 


a) Find out how much you owe each non-priority creditor . 

b) Add all of your non-priority debts up to give you a total amount. 

c) Divide each individual debt by the total amount of non-priority debts. 

d) Multiply this figure by the amount of available income you have. 

Examples


Here is an example of how to work out a pro-rata offer 


You have worked out that you have £100.00 of disposable income each month. 


a) You find out that you owe £500 on a credit card, £1000 on a personal loan, £233 to a catalogue and £200 on a store card. 


b) You add all of these non-priority debts together to give you a total amount of £1933.


c) To work out the pro-rata offer you should make to the credit card company, divide £500 by £1933. 


d) Multiply this figure by 100 (because you have £100 disposable income pcm). 


This gives you a figure of £25.87. This means you should offer to pay the credit card company £25.87 a month. 


e) Repeat the calculation to find out how much you should offer to your other non priority creditors. 


The figures below show you all the calculations:

Credit Card £500 ÷ £1933 x £100 = £25.87

Personal loan £1000 ÷ £1933 x £100= £51.73 

Catalogue £233 ÷ £1933 x £100 = £12.05

Store card £200 ÷ £1933 x £100 = £10.35 


Total Debts £1933.00

Total Pro rata Payments £100 pcm 


Your pro rata payments should add up to the disposable income available.

Pros





i) you have shown that you have made every effort to pay them back as much as you can, and

ii) you have maintained regular payments to them.


Cons