Introduction

Did your creditor(s) refuse your pro-rata payment offer? Use this letter template to send a request for them to reconsider your pro-rata debt repayment offer. Stressing the need to reduce your payments and the fairness of using a pro-rata offer might make some of your creditors change their mind. 

MoneyNerd has created pro-rata debt repayment offer letter templates (second request) for people with individual and joint debts. Download the one which is right for you for free, add your account details and shoot it off in the mail. It could be the letter that eases your financial situation. 

Letter Template

To Whom It May Concern

Regarding Case #: [your case number]* (required)

Thank you for your recent [letter/telephone call]* (required) about the above account.

I am sorry that you feel unable to accept the offer which I have made. Most of my other creditors have accepted the offers made to them and I have begun making payments. I cannot offer you more because I can only afford £[money for creditors]* (required) each month between all my creditors, and it would be wrong to stop or reduce payments to my other creditors in favour of your company. I have worked out my offer to you on a pro-rata basis. This is the same method that the County Court uses to work out repayments.

As my other creditors have agreed to my repayment offers, please reconsider my offer. As a gesture of goodwill, I will be making the payments that I have offered to your company from now on.

I look forward to hearing from you.

Yours sincerely


Downloadable Resource

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.

Download – Single (for one person)
Download – Joint (for couples)

How much should you pay towards debt?

You should only agree to make monthly debt repayments that you can afford. To work out what you can reasonably afford to repay each month without getting into further debt, you should create a budget with your incomings and outgoings. This will help you discover how much disposable income you have leftover, which should then be used to make repayments. 

If you have multiple creditors, you might want to consider using a pro-rata payment offer. This will ensure each creditor receives a fair amount of your monthly disposable income depending on how much money you owe them.

What is a pro-rata payment?

Pro-rata payments are when every party involved receives a fair share of the payment proportional to the whole. It might sound confusing, but it becomes clear with an example. 

Let’s imagine you have two credit card debts, one is £250 and the other is £750. The £750 debt is 75% of your total debt (£1,000), which means you should pay the £750 credit card provider 75% of your disposable income each month – and pay the £250 credit card company 25% of your disposable income each month. 

How do you work out pro-rata debt payments? 

If you want to make a pro-rata debt repayment proposal, you will need to know how to work out how much you will repay each creditor. Here are the steps to follow:

  1. Work out your disposable income each month
  2. Add all your debts together
  3. Divide each debt amount by the total of all your debt
  4. Multiply the answer from stage 3 by the amount of disposable income you have
  5. The answer is how much you should propose to pay for that debt (repeat for all the other debts)

Do creditors have to accept pro-rata payments? 

Creditors do not have to accept pro-rata offers. They may want to chase you for more money and not care about your other creditors. However, most companies see pro-rata offers as you doing your best to make sure everyone is getting the right amount of money proportional to the debt you owe them. 

If it is rejected, it is usually because you have debts of significantly different value. For example, you could have a £100 debt and a £5,000 debt. In a pro-rata offer, the £100 debt would not receive much of your disposable income, meaning the creditor would be waiting a long time for you to pay the debt off. 

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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