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Renegotiating your debts

Once you know how much money you have available for repaying debts, you can start to renegotiate your debt. Below are some examples of what you can do. Remember though that each situation is different and that you always need your creditors’ agreement to your repayment offers.

  • you can allocate part of the money to repaying your priority debts, and then discuss the offers with your priority creditors.
  • you can adjust your personal budget once these offers are accepted. This way you know how much money you have left for other debts.
  • you can allocate the remaining money between your other creditors and then write to them to ask for their agreement to your repayment plan.

Priority debts
You should already know how much you will be repaying your priority creditors. If you haven't got definite figures for each offer, do a calculation like the one below for your priority debt arrears; either allow a small amount for credit debts, or decide to pay off your priority debts first, and start repaying your credit debts later, once other debts have been repaid.

Use the Repayments calculator to work out your repayments. You can adjust the amount for credit debts until you're happy with the results.

Credit debts
You should now know how much you have left to repay your credit debts. If you don't, go back to your Personal budget and put in the figures for your priority debts. The balance left at the end is the amount left for credit debts.

To calculate each payment:

  • Add up all the debts, to give the total amount you owe.
  • For each creditor, multiply the money you have for credit debts by the total debt for that creditor.
  • Divide the result by the total amount of all your debts.
  • The result is the repayment for that creditor.

Tip: Use either all monthly figures or all weekly figures. To change a weekly figure to a monthly figure, multiply by 52 and divide by 12. To change a monthly figure to a weekly figure, multiply by 12 and divide by 52.

You can use the pop-up calculator to make all these calculations.

Alternatively, the Repayments calculator will do all of the calculations for you.

Offers of repayment
Use the Creditor letters activity to write a letter for each of your creditors.

For each creditor:

  • Make an informal contact by phone to explain your situation and find out who to write to.
  • If the first person you speak to is unhelpful, ask to speak to someone more senior.
  • Send your offer together with a copy of your personal budget (or take them with you if you are asked to go and see them).
  • When you receive an acceptance of the offer, check it and confirm it if necessary, then make arrangements to start the repayments (you could use a paying-in book or a standing order).


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