• When you have overcome the initial contact with a creditor you will enter into a payment arrangement period that can range from a month to an indefinite period. You may be told that they will accept a reduced payment for three months, then you will be expected to resume normal payment and reduce the outstanding arrears, or that your case will be reviewed in 6, 9, 12 months…

• You will be expected to increase your payments pro-rata when you pay-off creditors or if your financial circumstances improve. If you had debts due to unemployment and you get another job it could be tempting to leave the reduced payments ‘just for a while’. You run the risk of loosing the complete co-operation of all creditors.

• In serious situations the creditor will know that the debtor is unlikely to ever resume normal payment, or even repay the debt. Whatever the situation or arrangement, you will be expected to complete an Income & Expenditure Statement every six months (some creditors every three months). You must return these requests promptly, and factually. After a period these requests may seem more regular than they are. Accept them as a small price to pay (literally).

• Finally, never take out a loan when you are paying reduced payments to your creditors. This is not only unfair, but you run the risk of your creditors checking your up to date credit record and finding new credit details: if you do, again, expect the debt collector to call.

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