If you have multiple debts and can no longer afford to make your monthly repayments to each creditor, you could ask your creditors to accept pro-rata offers. We’ve made asking creditors to accept pro-rata offers easy with our free letter template.
Simply download the single or joint letter template depending on if you have single or joint debts (or because you worked out a joint budget) and then add your own relevant details. Our letter will save you time, show your creditors that you are trying to make things right and could make a big difference.
Download it now and read on for more information about pro-rata debt repayment offers.
To Whom It May Concern
Regarding Case #: [your case number]* (required)
Since making the above agreement with you, my circumstances have changed. I cannot now afford to make the agreed monthly payments for the following reasons.
[include a paragraph outlining the special circumstances you have that you want the creditor to take into account.]* (required)
I enclose a budget summary which shows my total income and my total outgoings. As you can see I have only £[enter amount]* (required) per month left for my creditors.
I have worked out the offers I have made to my creditors on a pro-rata basis, and I have written to all my creditors asking them to accept reduced offers.
Because of my circumstances, please agree to accept a reduced offer of £[enter amount]*(required) per month. If you are adding interest or other charges to the account I would be grateful if you would freeze these so that all payments I make will reduce what we owe you.
If my circumstances improve, I will contact you again.
Please send a [paying in book/standing order form]* (required) to make it easier to pay you.
I look forward to hearing from you as soon as possible.
The download links below take you to a Google document template where you can make a copy or save in any document format you like. Note, you may have to login to your Google account.
Can I reduce my debt payments?
If you are struggling to meet your monthly debt repayments, there are various ways to reduce the amount you need to pay. Communicating directly with your creditors is one of the easiest ways to do this. You should explain what you can afford to repay and ask for repayments to be lowered. With good evidence, this can be effective.
If you are communicating with multiple creditors about wanting to reduce your monthly repayments, offering pro-rata repayments is a fair and easy way to make your request. It shows all creditors that you are treating every debt with equal respect and responsibility.
Other ways to reduce your debt payments is to use debt solutions like IVAs, DROs or DMPs. You can find more information about these here with us at MoneyNerd or by calling a debt charity.
What is a pro-rata payment?
A pro-rata payment is a way to split payments proportionally between all parties.
For example, if you have three debts of £500, £500 and £1,000 and have £100 spare to pay these off each month, you should divide the £100 based on how much you owe. Therefore, you would use £25 to pay off one of the £500 debts, another £25 to pay off the second £500 debt and then £50 to pay off the £1,000 debt because you owe this creditor double the other two creditors (£25 x 2 = £50).
Note, this is just an example and there could be reasons not to use pro-rata payments.
How is a pro-rata debt payment calculated?
Pro-rata payments are calculated by working out how much you owe each creditor as a percentage and then using the same percentage of your disposable income to pay that creditor.
For example, in the above scenario, you would pay 50% out of £100 disposable income (£50) to the creditor you owe £1,000 to because this debt is worth 50% of your total debt (£500 + £500 + £1,000 = £2,000).
How to request pro-rata debt payments
If you want to request pro-rata debt repayments with all your creditors, use our free letter template to make your request effective. Our readers have a lot of success using our letter template, and you could too!
If they reject your request, consider using our second request for pro-rata payments letter.