Go-it-alone DMP - pro-rata or all-the-same payments?

robthesnapper

We're picking up conflicting advice on how to approach credit-card companies.

CAB have told us this afternoon that whatever free money we have left should be split equally between all the creditors.

However we've also heard from someone who has actually handled her own DMP, that payment should be split pro-rata - so if you owe (say) 40% of the total debt to one company, they should get 40% of the available funds.

So which is more correct?

dmb_2

I was told by National Debtline that you should pay creditors pro-rata payment. so highest debt should get highest proportion of repayment. Good luck

robthesnapper

Thanks dmb, I suspected this would be the case.

Tixy

Yep pro-rata payments are standard. Only time you would make equal payments to them all is if the amount you could afford was at a level that they were only token payments (say a £ or 2 to each creditor a month).

robthesnapper

OK, that makes sense, thanks Tixy.

lvm

Definitely pro-rata - means that all accounts will be cleared at the same time too.

saltnvinegar

robthesnapper wrote: »

We're picking up conflicting advice on how to approach credit-card companies.

CAB have told us this afternoon that whatever free money we have left should be split equally between all the creditors.

However we've also heard from someone who has actually handled her own DMP, that payment should be split pro-rata - so if you owe (say) 40% of the total debt to one company, they should get 40% of the available funds.

So which is more correct?

Yes definately pro-rata.

The main reason is that all your creditors are being treated fairly with respect to their portion of your surplus income.

Another reason is that its aligned to the same method used by the courts to determine payments (in the very unlikely event things got that far). Creditors are loath to take you to court if you have offered them a pro-rata payment as they will incur costs for the likelyhood of getting the same payment or possibly less.

Best

SnV