Filling in Income and Expenditure Statements

When you hit a problem with repaying debts it is almost certain that, soon after contacting your creditor, you will be asked to fill in an income and expenditure statement. After all you owe and the creditor wants the money back somehow. And the creditor wants to get the best deal it can.

But so do you.

Which is the basis of all negotiation.

In theory there is a common financial statement agreed within the financial and financial advice community. But all those I have seen differ from one another. On the other hand you, the debtor, are expected to offer the same information to all your creditors; hence a common income and expenditure statement makes sense.

My experience is also that the prepared statements are strong on declaring income and weak on room for expenditures.

You do need time to think through how the change you are experiencing is going to affect you and how you live in the future—a new future for you.

This is why I recommend two initial letters to creditors. The first revealing the fact of a debt problem. This allows time to consider what your debt is and means to your life, what your needed expenditures are and what the future expectations are, and similarly what your income is and will be, and how much flexibility uncertainty about the economy needs to be built into the agreement which this is only the start of negotiating.

That second letter can then explain your situation in more detail and offer a proposal to deal with your debt. It will be soundly based and you will be confident that you can maintain whatever debt repayment schedule you are offering the creditor.

Different creditors have different attitudes to handling debt—some are obviously good at customer relations, others seem to lack any sense of how to negotiate the new debt situation. So on the phone you may well be pressured to a deal quite at variance with what you have worked out. Never agree anything on the phone. Ask them to put their proposal in writing.

And always take time to think through what your debt position is, what any proposal means to you, and how much you need to spend weekly to maintain a reasonable life.

Joseph Harris
Debt Control Man


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2 Responses to “Filling in Income and Expenditure Statements”

  1. Peter Quinn Says:

    Hi. I am a long time reader. I wanted to say that I like your blog and the layout.

    Peter Quinn

  2. debtcontrolman Says:

    Thank you Peter. There is a lot more to come, and I have the first part of my step by step book almost ready.

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