Debt problems - How to deal with creditors

[ Bookmark this page! ] [ get HTML Version ]

Get Me Out Of Debt
Owing large sums on your credit cards and other bills is a very stressful situation. Every dime of your paycheck is allocated before you even cash it, you have collection agencies calling you both at home and at work, and you constantly have to worry about making ends meet. Worst of all, with the incredibly high interest rates you're paying.

Under such an overwhelming condition, you may... Read debt consolidation 1 article



Debt Management - Budgeting
Introduction

The most fundamental basic of debt (or money) management is to be in control. To know about every penny that comes in and where every penny goes. Ideally, when you open those envelopes that arrive on the door mat every day there should be no surprises.

If you are in debt and/or having financial difficulties, you need to bring yourself around to a situation where ... Read debt consolidation 1 article



Debt problems - How to deal with creditors
However far you are along the road of financial/debt problems, the same principles apply to dealing with your creditors.

However rude, intrusive, threatening the correspondence/telephone calls FROM your creditors, your correspondence/phone calls TO your creditors must be:

* Calm
* Brief
* Factual
* Relevant
* To the point

You must create the impression that you are efficient, knowledgeable and trustworthy. The person dealing with your correspondence is merely doing their job, which is acting on behalf of their employer -- to whom you probably owe money. This person probably has the opposite point of view from you, but it is not personal and you must not let it become so.

Just as you would, this individual will respond better to a person who appears to be calm, and believable, and know what they are doing.

How can you appear calm and believable, efficient, knowledgeable and trustworthy, when you possibly owe more than you can afford and have probably made past mistakes? The answer is that your past history is less important to the person dealing with your account than your present attitude and what that promises for the future.

That is not to say that what you have done in the past has no relevance, or that you can go on to make promises you don't keep - far from it. However, if you acknowledge your current problems, explain your past mistakes if required, and most important of all, do everything you say you will do from now on, you CAN improve your relationship and situation with your creditors.

If you react with anger, if you are agressive, if you fail to keep your promises, you will merely make your problems worse.

Be calm, be prepared, and make these all-important first steps work in your favour.

Look out for How To Get Rid Of Debt Problems Step 2, where we look at 'How To Prepare A Financial Statement'

Bookmark this page | Search this site | E-mail to a Friend



Debt problems - How to prepare a financial statement

Here is how to prepare a financial statement, for the purpose of negotiating reduced payments with your creditors.

Secured/Unsecured debts. Before we get into the substance of this, let's ensure we are clear about the significance of secured debts.

If the debt is secured, there is a risk that the item upon which the debt is secured could be re-possessed, if payments are not maintained. One of the most common forms of secured debt is the mortgage -- which also typically represents a very large debt and therefore a potentially very large problem.

There are two important points to note concerning secured/unsecured debts and attempting to reduce payments.

1. any creditor who is owed a secured debt has no reason to accept reduced payment. The creditor, in nearly all cases, would rather re-possess the item upon which the debt is secured

2. The borrower must be aware that, in the case of a secured debt, any change in the agreed payments carries a risk that the item upon which the debt is secured could be re-possessed, unless the creditor agrees in advance to accept the change. Thus, in most cases, it is only unsecured debts which offer the chance of a potential reduction in payments.

Right, on to the financial statement.

The following are the items you should list, where applicable, in order to present your total income and expenditure. You should calculate and enter a monthly figure for these items.

You might like to copy and paste the following items into your Word Processor/Spreadsheet/Text Editor for printing out.

INCOME

Wages Salary (after all deductions)........................

Partners or second salary (after all deductions)...........
Benefits
Unemployment...............................................
Maternity..................................................
Sickness/Invalidity........................................
Child/One Parent...........................................
Retirement.................................................
Income Support.............................................
Family Credit..............................................
Contributions
Maintenance................................................
Lodger/Dependants..........................................
TOTAL........................................................

EXPENDITURE
Rent/Mortgage................................................
Rent/Mortgage Arrears........................................
Second Mortgage..............................................
Endowment/Mortgage Protection................................
Child Maintenance............................................
Life/House Insurance.........................................
Council Tax..................................................
Water Rates..................................................
Gas..........................................................
Electric.....................................................
Telephone....................................................
Clothing.....................................................
TV Licence/Rental...........................................
. School Meals.................................................
Meals at Work................................................
Car Tax/Insurance............................................
Travelling Expenses..........................................
Spending Money...............................................
Total .......................................................

You should ensure that this total expenditure figure is sufficient for your needs, and that no items of expenditure can be considered excessive. Obviously, total expenditure cannot be MORE than total income.

Your income figures will need to be proven by a copy of a recent payslip.

Look out for How To Get Rid Of Debt Problems Step 3, where we look at 'How To Negotiate Reduced Payments With Creditors'

Rob Hawkins is the owner of Debt Consolidation UK. His company Chiltern Debt Management UK has helped more than 50,000 people to get rid of debt problems, and won the coveted 'Debt Counsellor of the Year 2004' award.




Top rated articles for debt consolidation 1

1. Get Out of Debt Services
There is an ever increasing reliance on the use of credit to fund the lifestyle demands of the 21st Century consumer. With that demand however is coming an additional problem. Over indebtedness. Credi... Read debt consolidation 1 article

2. Best Debt Consolidation Services
Your mailbox is bound to overflow with rival offers for services of debt consolidation if you have even a small bit of credit card debt. And it can be quite a problem to understand which one will be t... Read debt consolidation 1 article

3. Consolidate Your Debts
If you have gotten yourself into debt over your head, you are probably wondering, should you consolidate your debts? It can help you manage matters and get those debts paid off, but it isn't for every... Read debt consolidation 1 article

4. How to Get a Debt Free Life
Who likes to face debt problems? Obviously, nobody wants to fall into a debt trap. However, managing debts in a proper way is a matter of concern for each and every borrower. In that case, debt manage... Read debt consolidation 1 article

5. Get Rid of Credit Card Debt
Sometimes, luxuries can seem like necessities. You may not need the fancy cable television, the nice car, the expensive clothes - but don't they seem so very important? Before you know it, you're in d... Read debt consolidation 1 article

6. Debt reduction
If you feel like you are swimming in a sea of credit card debt, you are not alone. This fact probably will not make you feelany better, but the fact that you have lots of company means that there are ... Read debt consolidation 1 article

7. Debt Elimination Fraud
Due to the growing amount of debt people have nowadays, fraud has also grown, because desperate people with debts tend to believe in anyone's word in order to get rid of the situation and lighten thei... Read debt consolidation 1 article

8. Managing Credit Card Debt - The Truth
It's not hard to get yourself in a hole that requires bankruptcy to bail you out these days. All of the expenses in our lives, plus the debts from loans big and small, credit card bills, and other mis... Read debt consolidation 1 article

9. Debt Reduction Services
Cashless shopping is clearly convenient and it there's no doubt it comes in handy whenever you don't have the cash to spare for those "unexpected" expenses or "must have" indulgences. Unfortunately, l... Read debt consolidation 1 article

10. Consolidate Your Debts With Consolidation Loans
Generally, for meeting he various desires, people often take lots of loans. These loans become a burden when it comes to repayment of the instalments. It is difficult to handle multiple debts, but the... Read debt consolidation 1 article


Credit Counseling and Debt consolidation services in Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi,



Debt problems - How to deal with creditors
Debt consolidation services in Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,

Debt consolidation services in Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin and Wyoming.

Add website or submit URL link of your site to 1000 free directory