MONEY TRICKY TRICKS : THE NEED TO PLAN

The most important thing in any situation where things become unmanageable is to get a clear picture of the situation and do everything in your power to set things straight. Never ignore the problems....they won't go away!

If you are in the unfortunate position of having more credit than you can repay at the original agreed rates then you must make arrangements to have these rates substantially reduced, so as to turn the situation from one of apparent hopelessness into one which you can handle.

As you will be told in any publication that offers advice to people with debt problems, you must first get a wholly clear picture of your situation and then formulate a strategy for dealing with it.

The first step you should take is to make a list of all the money you owe. This should include everything, even money owed on a casual basis. This will give you a realistic overall picture of the extent of the problem.

When you have listed all your debts, including your mortgage if you have one, you should then make a list of the repayment instalments which were originally agreed. Once you've made such a list you should add all the amounts together to arrive at a figure for your monthly outgoings.

Also, calculate the amount you need to spend each month on the necessities of life; food, clothing, etc. Add this to the monthly outgoings figure from all your credit. If this figure exceeds your total monthly income, then you don't need to be a genius to work out that you are in a financial situation which is most definitely problematical.

By writing down all your incomings and outgoings as suggested above, you should immediately feel some sense of relief that at least you are beginning to address the problem. As the old saying goes - "A problem recognised is a problem halved".

Of course the "half" of the problem which is "solved" by arriving at the stage of it being properly recognised in the first place is, obviously, the easy half. The other "half" of the problem is the part which is going to take some effort to overcome.

When you explain your reasons to creditors for the difficulties you are having in keeping up payments they will much more often than not handle your case in a reasonable and sympathetic fashion. Believe me, they are used to hearing from people with repayment problems.

After having explained your circumstances to creditors they will usually agree to considerably reduced instalments. Before finalising a temporary repayment contract with you, many of these creditors will send you an income and expenditure form. These forms are tedious to fill in and ask you for a detailed listing of what money you have coming in and what you owe to others and the payments you need to make. However, rather than fill in a separate income and expenditure form for all creditors, since these forms are much the same for each creditor, you could fill in only one form and photocopy it to send to all of them.

An alternative to filling in an income and expenditure form (or forms) would be to make up your own personal statement which includes all the information requested in these forms. There will be parts of the forms to fill in where you are asked for details of what you owe to whom. You don't need to be specific about the debts you owe to other creditors if you don't want to. Who you tell about what you owe, and to whom you owe it is for you to decide. Creditors only have these forms because they want a reasonably detailed explanation of your reasons for requesting a substantial reduction in repayment instalments.