What is ment by Pro Rater??????

minty_3

I am going to write to my creditors and make an arrangement to pay them direct instead of through a Debt Management Plan (Baines & Ernst)
Whom I have been with for 5yrs "Pay Plan" can't help me as I need to have around £8000 of debt but I have reduced mine from £14412 to £5652 but £1740 was spent on Management Fees.........
I have a template of a letter to send but it mentions Pro Rater what does this mean?

I take it this letter sound okay or can anyone advise on a different one?

Dear Sir/ Madam,
Re. Account Number:
I am encountering financial difficulties, and as a result of these, I am having problems in keeping up with payments on this account.
I am having problems because I used a Debt Management plan through Baines & Ernst, over the last 5 yrs they have put my fees up gradually I would rather make an arrangement without the help of a Debt Management. So I don’t have to pay any fees and more money will go to my debts.
In order to bring matters under control, I am asking all of my creditors for the following information.
It would be helpful if you confirm the following.
The date and type of the original agreement.
The rate and frequency of repayment.
The current balance and level of arrears.
Any current recovery action.
Once I have received replies from all of my creditors I will contact you again with a financial statement and proposals for repayment. I would be grateful if you would take no further action for the time being, and freeze any interest or charges accruing on this account.
Thank you for your help on this matter.

Yours faithfully,
I wish I had found this Forum years ago....

Robert_Sterling_3

An example

If someone is paid £200 for working a five day week or pro rata.

It means for one day they would get £40
For two days they would get £80

I.e. The pay is pro rata to the number of days worked

Roughly speaking " in the same ratio "

Tondella

Hello Minty

It's been a long day for me so I may just be screen dazzled but I can't see where your letter mentions pro rata? It would be useful to give as a specific example when trying to explain to you what pro rata means. If I can use another example then, say in a job advert, if the job was part time and the salary was advertised as £10 000 pro rata, then that means that you would be paid £10 000 if you worked full time, £5 000 if you worked half the time, £7, 500 if you worked three quarters of the hours of a full time job etc etc. If you can give your specific example then i might be able to be more helpful.

Are you aware that there are free debt management companies out there such as pay plan and CCCS? They will manage your repayments and yet take no fee whatsoever by my understanding. Lots and lots of people on this site sing their praises, and they will probably have better powers of negotiations with your debtors than trying to tackle everything by yourself.

Good luck

Tondella

thaylock

Pro-Rata: This means in 'proportion to' & is paid when you have some money left to pay credit debts.

For example, if you owe Natwest £100, LLoyds £100, Virgin £800 and have £100 to pay them each month, the pro-rata payment to Natwest would be £10 per month, £10 to Lloyds per month and £80 per month to Virgin.

In other words, the amount you pay your creditors per month is in proportion to what you owe them.

jeckyllandhyde

Hi

I think you mean pro-rata payments, this is known in the money advice trade as "equitable distribution of available income" which means that when your PRIORITY creditors (see example below) have been paid and your essential outgoings (food/ travel/ prescriptions/laundry/school/work exspenses/special diet/ etc) have been met whatever is left over is chopped up and distributed amongst your NON PRIORITY creditors.

PRIORITY CREDITORS:

(rent/mortgage/inc arrears/secured loans/elec/gas/council tax/tv licence/fines/maintenence/compensation orders/tax+vat etc etc)

NON PRIORITY CREDITORS:

(credit cards/unsecured loans/catalogues/provident/etc)


All NON PRIORITY creditors are treated fairly and equally based upon the amount owed to them, the correct way to calculate pro-rata payments is as follows:

(Amount owed to the individual creditor) divided by (total amount owed) x (total available monthly income) = pro-rata offer of payment

for example; you have 3 creditors a,b and c

creditor a is owed : £1000.00
creditor b is owed : £800.00
creditor a is owed : £250.00

total amount owed: £2050.00

your "available" income is £12.00 per month after all outgoings.

Calculate pro-rata payments:

creditor a (1000.00 / 2050 x 12 = £5.85 a month)

creditor b (800.00 / 2050 x 12 = £4.70 a month)

creditor a (250.00 / 2050 x 12 = £1.45 a month)

total repayments to creditors = £12.00 per month


PLEASE NOTE: this method or strategy is to be used to offer payment to ALL NON PRIORITY creditors only and reduced offers will normally be refused unless supported by a CREDIBLE financial statement detailing all of your income and outgoings and detailing you & your families personal circumstances. you would be well advised to go to a specialist money advice worker to help you, the CAB offer this service and its free !

DO NOT MAKE OFFERS OF PAYMENT YOU CANNOT MAINTAIN AS YOU WILL DEFAULT ON THE AGREEMENT AND CREDITORS TEND TO BE MORE AGGRESSIVE IN THIER RECOVERY METHODS ONCE YOU HAVE MESSED THEM ABOUT, EG BAILIFFS & COURT ACTION !

hope this helps you out

jeckyllandhyde

Hi

have a look at these sites for further help:

http://www.debtquestions.co.uk/index.php

http://www.moneyadvicetrust.org/commonfinancial_statement_brochure.pdf

http://www.nationaldebtline.co.uk/

http://www.tameside.gov.uk/welfare/debt/index.htm#contents