Introduction - when attempting to negotiate with your creditors yourself,
you must first calculate how much you can AFFORD to pay each month. The amount
you can afford is the difference between your monthly income and reasonable
monthly living expenditures (your Disposable Income).
Calculating Disposable Income - If you have decided to try and negotiate
reduced payments with your creditors yourself, you must first calculate how much
you can afford to pay them in total each month. This figure is called your
Disposable Income. Use our
Disposable Income Calculator to
help you do this. See help notes
also.
The
debt calculator UK tool is designed to help you to monitor exactly
what you are spending your money on each month. It will also help you compare
your living expenditures with your income to see what is left at the end of each
month. This remaining balance is called Disposable Income. It is the money left
over each month which you can use for other things such as saving for a holiday
or as is more often the case, REPAYING YOUR DEBT.
Dividing Disposable Income Between Creditors
- once you have calculated your Disposable income, you need to work out how
much of this money you should offer to each of your creditors. The split must
be made fairly between the creditors. The method accepted by most creditors is
based on a “Pro Rata” or proportional split depending on the relative value of
each debt. To help
you calculate the proportion of your disposable income each creditor should
receive, use our
Pro
Rata Payment Calculator
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