Offers to Creditors

Offers to Creditors

If you’re asking your creditors to accept reduced payments to your debts, for example if you’ve decided to manage your creditors yourself instead of entering a debt management plan, you’ll need to make sure that the offers are fair to have the best chance of them being accepted.

To do this, you’ll first need to know what you can afford to pay towards your debts each month. If you haven’t already made a budget, you’ll need to list all of your income, all of your essential outgoings, and deduct the outgoings from the income to see what’s left over. This is called your disposable income. Once you know this, you can work out what to pay to each debt.

Firstly, list all of your debts and work out what you owe in total.

Then use the following calculation:

(Debt balance * Disposable income)/Total debt = Pro-rata offer


In this example, the disposable income is £160

Debt Balance Calculation Pro-rata offer
Bank Loan £4,550 (£4550*£160)/£12450 £58.47
Credit Card £6,700 (£6700*£160)/£12450 £86.10
Store Card £1,200 (£1200*£160)/£12450 £15.42
Total Debt £12,450