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:
MANAGING THE NEGOTIATIONS YOURSELF
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.
Talk to a debt expert for free
Explain your situation and find out the right solution for you.
Talk to our panel of recommended experts over the phone, via email or even ask them to visit you.
Get free advice in a face to face meeting
Arrange for a debt consultant to visit you for free and explain the options.