DMP Mutual Support Thread (Part 5)

dlb

debrag wrote: »

how does that work? Aren't all creditors payments over the same period?

No not all are paid at the same rate so they are all cleared on the same day.

These 4 are the ones that are getting only £5 per month, but because the ballance was lower it still means they will be cleared first.

Each creditor is paid pro rata so the more you owe them the larger payment they get out of your monthy payment. Hope that makes sense...eg

My largest creditor gets £149 a month and i owe 9k=paid in 4.5 years!!
My smallest creditor gets £5 a month and i owe them £30=paid in 6 months

So as the smaller ones get paid off, that monthy payment then gets split between the remaining creditors, reducing the time it will take to clear them.

debrag

mine all work out over the same time frame


Barclaycard £15.85 a month £439.82 left = 27.7 months
Capital One £63.08 a month £1750.58 left = 27.7 months
HFC £48.95 a month £1358.62 left = 27.7 months
BoS £23.34 a month £647.90 left = 27.7 months
TSB OD £48.12 a month £1335.46 left = 27.7 months

yellowmonkey

Good luck with the DMP BlueIsTheColour

All the best

ym

dlb

debrag wrote: »

mine all work out over the same time frame

So if you owed someone £1000 and someone £100 they will both be cleared on the same date?

This is how my dmp has always work hence why i now only have 8 creditors and not 14 plus like i started with 3 yrs ago.

My company pay more to the companys i owe more to, all the other creditors are aware of how much each other are getting too.

I know my largest creditors wouldnt be happy with £5 a month on a 9k debt, but it would be silly to send £149 a month to a creditor that is only owed £300.

debrag

no they don't all get the same amount each month otherwise debts would clear before others, yes if I owed someone £1k and someone else £100 they would clear on the same date.

my debt payments are calculated pro-rata by %

dlb

Im wondering if this is because one of my creditors Natwest have set a fixed fee replayment..meaning they will not accept any less than £149 a month on my 9k debt.

You got me wondering now..and confused as i thought mine was work out pro-rota too???

All i know is that Some debts have been cleared no one applying interest and im 3 years in on my dmp...so however they working it out..im not too bothered as all creditors happy LOL

debrag

that is probably the case for you. Who cares as long as they are getting paid

Rabbit-in-headlights

It depends on who you do the DMP with, I believe Payplan base payments on the total amount owed but CCCS (who I'm with) calculate pro rata payments based on the contractual payments, so some debts will clear sooner than others. As one debt is cleared, the extra money freed up can then be used to increase the payments to the remaining creditors...and so on, until all debts are cleared.

rabbit

dlb

Too right aslong as they are happy...although im going to have a look at my figures again tommorow, need to do it anyway as have my annual review due next month.

Thanks for pointing it out...ill crunch some numbers tommorow lol

marfan_not_martian

If my understanding of how CCCS work out pro-rata payments is correct it goes something like this


Mr B owes £11,200.00 he has a disposable income of £87.00 per month. He has 3 creditors: -
Bank A he owes £ 1300.00
Bank B he owes £ 4683.00
Bank C he owes £ 5217.00
Total owed £11200.00
The pro rata payment formula works like this: -
Individual debt x remaining funds THEN DIVIDED BY (/) total debt owed = individual creditors offer
Bank A £1300.00 (individual debt) x £87.00 (remaining funds) / £11200.00 (total debt owed) = £10.09
Bank B £4683.00 (individual debt) x £87.00 (remaining funds) / £11200.00 (total debt owed) = £36.37
Bank C £5217.00 (individual debt) x £87.00 (remaining funds) / £11200.00 (total debt owed) = £40.52

Total payments to creditors = £86.98 (taken from http://www.leedscitycreditunion.co.uk/content.asp?section=114)


Hope I am correct in my understanding of pro-rata payments