Once you know how much money you have
available for repaying debts, you can start to renegotiate your
debt. Below are some examples of what you can
do. Remember though that each situation is
different and that you always need your
creditors’ agreement to your repayment offers.
- you can allocate part
of the money to repaying your priority debts, and then discuss
the offers
with your priority creditors.
- you can adjust your personal
budget once these offers are accepted. This way you know
how much
money you have left for other
debts.
- you can allocate the remaining
money between your other creditors and then write to
them to ask for their agreement
to your
repayment plan.
Priority debts
You should already know how much you will be repaying
your priority creditors. If you haven't got definite figures for
each offer, do a calculation like the one below for your priority
debt arrears; either allow a small amount for credit debts, or
decide to pay off your priority debts first, and start repaying
your credit debts later, once other debts have been repaid.
Use the Repayments
calculator to work out your repayments. You can adjust the
amount for credit debts until you're happy with the results.
Credit debts
You should now know how much you have left to repay your
credit debts. If you don't, go back to your Personal
budget and put in the figures for your priority debts. The
balance left at the end is the amount left for credit debts.
To calculate each payment:
- Add up all the debts, to give the
total amount you owe.
- For each creditor, multiply the
money you have for credit debts by the total debt for that
creditor.
- Divide the result by the total
amount of all your debts.
- The result is the repayment for
that creditor.
Tip: Use either all monthly figures or all weekly figures.
To change a weekly figure to a monthly figure, multiply by 52
and divide by 12. To change a monthly figure to a weekly figure,
multiply by 12 and divide by 52.
You
can use the pop-up calculator to make all these
calculations.
Alternatively, the Repayments
calculator will do all of the calculations for you.
Offers of repayment
Use the Creditor
letters activity to write a letter for each of your creditors.
For each creditor:
- Make an informal contact by phone
to explain your situation and find out who to write to.
- If the first person you speak to
is unhelpful, ask to speak to someone more senior.
- Send your offer together with a
copy of your personal budget (or take them with you if you
are asked to go and see them).
- When you receive an acceptance
of the offer, check it and confirm it if necessary, then make
arrangements to start the repayments (you could use a paying-in
book or a standing order).
