The Sixty Minute Debt Buster:
Working out how much to pay non-priority creditors

Once you have completed your personal budget sheet, if you have some disposable income each month (i.e. money remaining after paying all essential expenditure and payments to your priority debts), then any non-priority creditors will each want their fair share of this money – these are called pro-rata offers of payment. A free debt counselling centre will help you to work out these payments, but if you want to calculate them yourself then this is how to do it :-

1. Make a list of the companies to which you will be making a pro-rata offer of payment, the amount you owe to each and the total amount of these debts.
2. Using the budget you have prepared, work out how much money you can afford to pay towards these debts. (disposable income)
3. Now calculate the pro-rata payments using the following formula ( you will probably find it helpful to have a calculator at the ready!) :-

Each debt ÷ total debt x disposable income = offer of payment

Here is an example of someone who has debts of £10,000 and £100 disposable income :-

Non –Priority Creditor	Amount	Offer of Payment
Loan 1	£5,000	£50
Loan 2	£2,000	£20
Catalogue 3	£1,500	£15
Credit Card 4	£1,000	£10
Credit Card 5	£500	£5
Total	£10,000	£100

Using the above formula, the calculation for Loan 1 would be :-

£5000 / £10,000 x £100 = £50

But this is just an example. You may have fewer or many more non priority creditors and would therefore need to repeat the calculation depending on the number of creditors you have.