How To Get Rid Of Debt Problems Step 2 -- 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.

---

Debt Management - How a Debt Consolidator Can Reduce Your Debt

A Debt consolidation program starts with evaluating your financial situation.... Read More

Credit Card Blues

For the average American family, debt, and especially credit card... Read More

Debt Consolidation with Free Government Grants? One Scam to Avoid

Have you ever seen a commercial or an ad promising... Read More

Getting Your Best Deal on a Consolidation Loan

If you find yourself having to make too many payments... Read More

Vultures and Victims

Has anyone noticed how many loan companies now fill up... Read More

Getting a Better Consolidation Loan Secured

If you're looking for the best way to reduce the... Read More

Get Out of Debt

It is said that a pet tiger cub can become... Read More

Open the Cash Vault Inside Your Home

Believe it or not, many people do not understand equity... Read More

Debt Consolidation Company and Companies

Debt consolidation companies have dotted the debt solution landscape as... Read More

Debt Consolidation Benefits

If you've ever been in a situation where you needed... Read More

Stafford Loan Consolidation

Stafford Loan ConsolidationA Stafford Loan, which can help to finance... Read More

Cutting Your Monthly Outgoing With Debt Consolidation

With consumer debt on the rise, many people have found... Read More

Escape the Credit Card Death Spiral

You're burdened with crushing debt and at the end of... Read More

Debt Consolidation Mortgage - Decode Its Apparent Complexity

Someone great once said that 'if it isn't the sheriff,... Read More

What Is A Debt Consolidation Program?

Debt consolidation programs are devised to get you out of... Read More

How Do I Know a Good Credit Card Debt Reduction Strategy When I See It?

Credit card debt reduction is an important part of the... Read More

Debt Consolidation Primer ? Four Things You Can Do to Get Out of Debt

Problem debt is rampant throughout America. In addition to mortgages... Read More

Private Student Loans ? Dispelling The Myths

Private Student Loans ? dispelling the mythsIf savings, grants, scholarships,... Read More

What is a Debt Consolidation Loan?

If your objective is to reduce interest rates and lower... Read More

Debt Elimination 4

Planning For Debt Elimination Without Surplus CashPreviously we looked at... Read More

No-Cost Student Loan Consolidation

No-Cost Student Loan ConsolidationA no-cost student loan consolidation ? doesn't... Read More

Debt Reduction Solutions

Finding solutions to reducing your debt takes some thinking and... Read More

Free Yourself Of Debt and Worry with Debt Consolidation

Debt consolidation programs can help you lift the burden of... Read More

Debt Consolidation can Ruin Your Credit

Yes, Debt Cosolidation isn't a good idea and I'll tell... Read More

7 Ways to Consolidate Your Debt

If you are in debt, you have several options available... Read More

Bad Credit Debt Consolidation Loans

Are you looking to consolidate credit card or other debt?... Read More

Why Choose a Debt Consolidation Loan?

Are you wondering why choose a debt consolidation loan? If... Read More

Whats the Difference Between Debt Settlement and Debt Consolidation?

The Debt Settlement process involves negotiating with your creditors to... Read More

10 Pointers on College Loan Consolidation

Should I consolidate my college loans or not?1. Still in... Read More

Debt and New Spirituality

Overcoming the stigma of being in dept, grow in self-confidence... Read More

Debt Consolidation: Its all in the Planning

If you're like thousands of other people who find themselves... Read More

Debt Consolidation ? Can You Negotiate with Your Credit Card Company?

The average American household has nearly $10,000 in credit card... Read More

Exploring Your Options for a Consolidation Loan UK

Whether you're wanting to consolidate your debt to avoid bankruptcy,... Read More