How to Deal With Your Creditors

Creditors have lent you money and if you are in great debt and are unable to pay the money in time they harass you through phone calls or dropping by at your door. This is a very disturbing situation. First of all you have must know your rights. Secondly your behavior towards your creditors must be calm, relevant and to the point.

A good behavior and realizing of the fact that you have made mistakes in the past and trying everything not to miss any more payments is very promising. This debt management behavior helps to develope a good relationship with the creditor.

How to Prepare a Financial Statement

For debt management just like it has been stated in several debt consolidation articles
you have to list your expenses and incomes down to assess your financial situation.
How and what should be listed is the question that will bother many people.
Before we make a financial statement for debt management you must be clear about the difference
between secured and unsecured loan.

Secured loans

A secured loan is a loan in which you are lent money with some collateral. This means that some of your property is tied with the money borrowed and if you are unable to repay the money you might loose your property. There are some other important points to consider about secured loans. First, the secured creditor doesn't worry about your late payments or to reduce them. They can simply possess the property with which the loan was secured. Secondly, a change in the repayment plan can also cause re-possession. Be very careful with debt management and talk with the creditors in advance before planning to change your payment plan.



In unsecured loan you have the option of reduced monthly incomes as it is not
secured with any type of collateral. The creditors fear that they might loose
the money if you file bankruptcy etc so they settle the debt with you. This debt
is usually credit card debt.

Financial statement

The financial statement for debt management should have a list of all of your income resources and your expenditures. This statement must be updated on regular monthly bases.