Hi, I am in the process of working out

[Karantiggy]

Hi, I am in the process of working out pro-rata payments to my creditors and my IVA is being set up by Payplan. They have asked me to work out what I can afford to my creditors, so I have used the following Debitor amount X what we have left / what we owe to all creitors = ****. I have worked out the following for a homeowner loan we have with Northern Rock and the pro-rata payment has come out at more that we pay them now, how can this be? We worked it out as follows: 29,665 X 570/75,740 = 223.25
Please help!! I have emailed Payplan but due to the fact it is the bank holiday weekend I have not had a reply and I need to get the offer letters in the post. Thanks

[kallis3]

Hi, we are with Payplan, and we never made any payments to our creditors whilst setting up our IVA.

I haven't a clue maths wise how you work out the pro rata payments, hopefully one of the professionals can answer it for you.

[Karantiggy]

Thanks. They have asked us to make a token payment based on what we can afford. I have worked out the figure from what we have left per month then used the formulae given, I am not sure why we have to make this payment I thought the whole idea of an IVA was for them to come up with a proposal to the creditrs then we pay-if its accepted. Thanks anyway

[MelanieGiles]

You work out how much you have left each month, taking your income and deducting essential expenditure and an element for contingencies - Let's say you earn £1,500 and your expenditure plus contingencies is £1,200 - this leaves £300 available for creditors.

Then say you have four creditors owed £10,000, £8,000, £5,000 and £1,500. You work out the percentage of the total - so £10k of £24.5 k is 41% - and therefore this percentage is applied to the disposable income - ie 41% x £300 = £123 - so this is the amount you would pay to the largest creditor each month. Work the same calculation for each of the other creditors, and you have your answer (I hope!)

[David Mond]

A mathematics professor to boot too! [:p]

[kallis3]

Thank goodness I never had to work that out - my maths is terrible and just looking at the calculation gave me a headache![:D]