Your financial statement is a crucial tool for taking control of your finances.

If you cannot meet monthly payments, you will need to send each of your creditors a copy of your financial statement as proof.

It is essential that you spend some time ensuring that this is a true and accurate reflection of your finances.

By following our step by step approach you will be able to set out how much money is coming in and going out of your household. And how much money, if any, you have left over.

You will produce a prioritised list of your creditors and be able to allocate your available income in a way likely to be considered fair and acceptable to your creditors.

Take a look at the sample financial statement (available in the chapter to download below)

The golden rule is to be as realistic as possible with your figures.

Remember your creditors will be closely reviewing your financial statement.

They will be comparing the figures to trigger points they have established such as the average housekeeping costs for a family of 4.

If they feel your figures are excessive they are less likely to agree to your offers of repayment.

Likewise, if you have underestimated, you are soon going to run in to more debt and have to go back to your creditors to explain the position.