Care and support

Pro-rata calculations

surplus income X individual debt
total debt

Example – pro-rata calculation

There is £30 per calendar month available for distribution among creditors. The sum owed to each creditor is:


creditor A £865.25

creditor B £352.01

creditor C £1,025.85

total £2,243.11


creditor A

£ 30
£ 2243.11 X £865.25 = £11.57

creditor B

£ 30
£2243.11 X £352.01 = £ 4.71

creditor C

£30
£ 2243.11 X £1025.85 = £13.72

You can confirm that the calculation is correct by adding up the offers made to the creditors. They should always add up to the total of the surplus income offered, in this case, £30.

If you have no spare income (for instance if you are on income support) it is wise to make a token offer, which will show that you are willing but unable to make the required payment. You can use the same process as above, but substitute a figure of perhaps £5.00 per month for the spare income. The outcome may look a bit strange, but it is a good illustration of the situation and shows that you are willing but unable to pay.

Freezing interest and charges

When contacting the creditor to offer a reduced repayment, it is essential that you ask the creditor to freeze interest and additional charges on the account. Freezing interest will mean that your reduced payment pays something off the sum owing, and the overall debt does not get any bigger.

Your creditors may question items of your spending, and they may even demand a higher payment than you have offered. Their demands may not always be reasonable, and this requires some thought and some negotiation.

If it is possible to make some form of payment, even token payments, whilst negotiating, this may create some goodwill.

If you are sure that you have set the details out correctly and offered a pro-rata repayment, it is best to stick to your offer as the repayment plan treats everyone fairly. If one creditor gets better treatment than others the entire plan can fall apart as everyone will want bigger payments.

If your creditors will still not accept the repayment plan, seek further help.