• The biggest problem with debts is to have to face up to them! Most people with debt problems adopt a form of amnesia. The same human ability that stops us from remembering a 'serious accident', seems to take over when we have 'serious debts'.

• An alcoholic has to face up to reality, take stock of their situation, and then take one day at a time. Debt problems are very similar. You have to admit (if only to yourself) that you have commitments beyond your control. You have to face up to the reality that they will not go away. You need to take stock of your entire financial position, and finally you have to deal with it: not 'one day at a time', but, just deal with it!

• The first thing you need to do is to prepare an 'Income and Expenditure' form. By working out what you have to spread over your creditors (however thin) you can begin to control your finances and future. See article on 'Income and Expenditure'

• Next you have to write or telephone all of your creditors (letters are preferred, as they are a true account of your negotiations). You need to state your current personal and financial position. It can help to explain why you find yourself in this position if the reason is helpful to your case (telling your creditors that you lost lots of money betting will not endear them to your cause, further, your creditors may decide to take legal action as you are likely to return to gambling at some stage). You need to state what you can pay and when this will happen. You should request a written acceptance of your offer, and that they will stop interest accruing on your debts.

• The mood of your letter should be that you had a problem, that you cannot get out of it overnight, and that you need their help and understanding to achieve a satisfactory solution for all. Creditors do not need to accept your proposal. Some may agree to, say, a three or six month arrangement, then review. Others will accept easily, and a small number may refuse (with the latter, you need to plainly express that you offer something for everyone, or nothing for all).

• Answer creditors letters promptly; be open and fair; never be bullied or bullish. As a debtor you will get intimidating letters and telephone calls, they will 'want this now', and 'that by then' or 'we will do that'. Creditors believe that 'the louder you shout (at debtors), the more you will get paid' (and it works). By showing your creditors that you are in control of your debts and your future, you will stop them shouting and get them to start listening!

Many thanks to Colin Duguid of Debt 24.com who is taking the time to provide this information as a service to homeworkers.