Paying off your non-priority debts
Work out what you can afford
Wait until you have reached agreements with your priority creditors before starting to pay off non-priority debts.
Update your financial statement to see if you have any income left to start paying your non-priority debts.
The best way to distribute any remaining income is by listing your debts and dividing the money between them as a proportion of the amount you owe.
Use this formula to work out the amount:
| Individual debt | x | Disposable income | = | Offer |
| Total debts | | | | |
Here’s an example, based on £100 per month available for all non–priority creditors:
Schedule of non-priority creditors
| Creditor | Amount owed | Offer (per month) |
|---|
| Acme Credit card | £5,000 | £50 |
| XYZ Loan | £3,000 | £30 |
| ABC Hire | £2,000 | £20 |
| Total | £10,000 | £100 |
Source: Credit Action
Once you have done this, you can send it to your non-priority creditors, with a covering letter and your financial statement.
No disposable income left?
If you have nothing left for non-priority creditors, then write to them explaining your circumstances. Agree to contact them if your situation improves and that you will make a token offer payment of £1 per month. This shows that you are serious about repaying your debt.
In any case, make sure you keep up your regular payments.
For free help and advice on paying off your non-priority debts call the Consumer Credit Counselling Service on 0800 138 1111.
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