Pro-rata offers in full and final settlement – confused!

mattymoo2014

As I am discussing on other threads, I have made some pro-rata offers in full and final settlement of my creditors.

However, I'm not sure I've done it correctly, as in one case the account is in my wife's name solely (whereas I thought it was joint) and in all cases I allocated a finite amount to every debt pro-rata rather than separating between her and me.

To top things off, I am confused about what to do with joint debts.

It will perhaps be best for me to list the debts and who they are for and then see what advice you can offer me / us.

Here they are:

akinika aka Halifax £7555 me
KPR aka Nationwide £6698 my wife
Mercers aka Barclaycard £10520 me
Metropolitan aka first direct £1981 me
Metropolitan aka first direct £1916 both
Santander £3647 my wife
total £32,311k

Please can someone suggest how to divide £10k fairly between these accounts?

glentoran99

First off id say you have slim chance of getting them to accept 10k

but pro rata with 10k works out like this

akinika aka Halifax £7555 me 2337.78
KPR aka Nationwide £6698 my wife 2072.59
Mercers aka Barclaycard £10520 me 3255.25
Metropolitan aka first direct £1981 me 612.99
Metropolitan aka first direct £1916 both 592.88
Santander £3647 my wife 1128.50

mattymoo2014

Yes, thanks, glentoran99.
Could you tell me how you did the calculation?

National_Debtline

Hi matty

There's a simple formula you can use when dividing a lump sum up on a pro-rata basis:

Lump sum available X each debt
÷ the total amount you owe to your creditors
= offer to the creditor

Example

You may have £10,000 owing to four creditors. You can raise a lump sum of £4,000.
You owe:

£2,300 to Mastercard
£1,200 to a catalogue company
£4,500 to a loan company
£2,000 to the bank

Use the formula

• £4,000 (lump sum available) X £2,300 (debt to mastercard)
• ÷ £10,000 (the total amount you owe to your creditors)
• = £920 (offer to mastercard)

Your offer to Mastercard is £920. You then do the same calculation for each creditor, using each individual debt in the calculation.

The above is taken from our fact sheet on full & final offers:

https://www.nationaldebtline.org/EW/factsheets/Pages/24%20EW%20Full%20and%20final%20settlement%20offers/Page-03.aspx

Kind regards

Dennis
Twitter: @natdebtline

glentoran99

National_Debtline wrote: »

Hi matty

There's a simple formula you can use when dividing a lump sum up on a pro-rata basis:

Lump sum available X each debt
÷ the total amount you owe to your creditors
= offer to the creditor

Example

You may have £10,000 owing to four creditors. You can raise a lump sum of £4,000.
You owe:

£2,300 to Mastercard
£1,200 to a catalogue company
£4,500 to a loan company
£2,000 to the bank


Use the formula

• £4,000 (lump sum available) X £2,300 (debt to mastercard)
• ÷ £10,000 (the total amount you owe to your creditors)
• = £920 (offer to mastercard)

Your offer to Mastercard is £920. You then do the same calculation for each creditor, using each individual debt in the calculation.

The above is taken from our fact sheet on full & final offers:

https://www.nationaldebtline.org/EW/factsheets/Pages/24%20EW%20Full%20and%20final%20settlement%20offers/Page-03.aspx

Kind regards

Dennis
Twitter: @natdebtline

Not quite my working but the same outcome,

Take each figure as a percentage of the overall debt, and then apply that percentage to the 10k

mattymoo2014

It's the fact that some debts are mine, some are my wife's, some are joint. Doesn't that have a bearing on the calculations?

Tixy

mattymoo2014 wrote: »

It's the fact that some debts are mine, some are my wife's, some are joint. Doesn't that have a bearing on the calculations?

Only if say the money all belongs to you and you want to only settle your own debts (or vice versa).

If you are trying to settle all the debts with the £10k then whose name they are in doesn't affect what the pro rata figure is.

mattymoo2014

I kind of wanted to treat mine and my wife's debts differently. The money is mine so in her case I wanted to be her third party.

glentoran99

What do you mean the 3rd party? the 3rd party for what?

mattymoo2014

The money belongs to me and I want to settle my own debts and hers.

Depth_Charge

Hi

Useful links on F & F

CAB Full & Final Calculator resource

https://nedcab.cabmoney.org.uk/fullfinalcalc.asp

CAB Full & Final Settlement general info

https://nedcab.cabmoney.org.uk/fullfinal.asp

DC