Debt Help UK

Debt Negotiating

Negotiating with your creditors yourself will cost you nothing and gives you ultimate control of the management of your debts. However, using this approach means that you will have to face your creditors yourself. This isn’t always easy, particularly if there are many of them.

So, do you have the time and ability to follow through with negotiating your own debt management? Consider the following advantages and disadvantages before launching forth:


Advantages Disadvantages
IVA Advantages/Disadvantages
Advantages You won’t have to pay any fees to an external company

Advantages You have control over what you say to who and when

Disadvantages You might find it difficult to reach agreement with all of your creditors – particularly if you have more than 3

Disadvantages You most probably won’t have as much experience and understanding of the law and what is and isn’t acceptable, therefore leaving you more open to intimidation

Disadvantages This will add more stress to an already stressful situation – will you be able to cope?

What To Do Next

Calculate your disposable income

When attempting to negotiate with your creditors yourself, you must first calculate how much you can AFFORD to pay them each month. The amount you can afford is the difference between your monthly income and reasonable monthly living expenditures. This figure is known as your Disposable Income.

Divide disposable income between creditors

Once you have calculated your Disposable Income, you must then decide how much of this to offer each creditor. The normal way to do this is to divide your disposable income between your creditors on a Pro Rata Basis. ie. Each creditor is offered a percentage of the available Disposable income based on the amount of debt they are owed. For example, if the total amount owed to all creditors is £10,000 and creditor X is owed £5000, they are owed 50% of the debt. They should then be offered 50% of the Disposable Income.

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