We work out what to pay your creditors using the contractual payment amount. This is what you would have agreed to pay when you first took out the debt. The payments we make are in proportion to these original amounts rather than the current balances.
For example:
- Client A has a DMP payment of £15
- They have a credit card with a balance of £1,000 and a contractual payment of £25
- They also have a loan with a balance of £7,000 and a contractual payment of £50
- Their payment to the credit card will therefore be £5 and £10 to the loan
We calculate payments this way because:
- Accounts are paid at a similar rate to the original contract you signed
- Creditors will be repaid one by one, so you'll clearly see the progress you're making
- As smaller balances are repaid, the larger balances will receive a higher amount
Creditors are familiar with how we pro-rata payments, and if they query this you should direct them to us. If you make ad hoc direct payments, some creditors may come to expect this and may contact you more often.
Fair payment to creditors
The budget we helped you put together means that you’ve got enough money to live on and you're paying as much as you can afford towards your debts.
We make sure that this payment is shared fairly between your creditors so they each get the maximum amount possible. You should never favour one creditor over another by making additional payments. This could mean that you don’t have enough money to live on or you fall behind with your priority bills. The consequences of falling behind with these payments are far more serious than not making extra payments to your debts.
If your creditor tells you they aren’t accepting your offer of payment, you should still make your DMP payment and we’ll send it to your creditors as they can’t refuse a payment from us.