The whole process of taking control of your finances comes down to negotiating with your creditors.

Negotiations will usually be carried out by either letter or phone – and may be done through third parties like debt agencies or solicitors.

In the Moneyvillage.ie 2010 survey, almost 90pc of people stated that they would not be confident when contacting their creditors if they were in financial difficulty.

But it is essential you contact your creditors as soon as possible so that they can help you and work with you in resolving your situation.

The initial call or letter will be to explain that you are experiencing financial difficulties and ask for the information you need in order to complete your financial statement.

Explain you are having financial difficulties due to redundancy / unemployment / divorce or whatever your personal circumstances are.

Ask them to provide you with the information such as the balance owing, the terms of repayment, any interest or penalties, the extent of the arrears and details of any insurance policies your payments may be covered by.

After the initial call, there may be a number of other communications. You should take detailed notes of all conversations in a dedicated notebook.

Keep copies of all correspondence you send and receive and to make a note of who you spoke to on the phone and ask for confirmation of any thing important in writing.

When negotiating on a repayment schedule you should make payments regularly – not sporadically.

Creditors prefer to see regular payments of €5 rather than €10 one month, nothing the next and possibly €15 the next.

Ensure all offers of payment you make realistically reflect what you can afford to pay – do not be tempted to offer more than you can afford.

And don’t give up trying to reach an agreement with your creditors – even if they are being difficult or unhelpful. Simply ask to speak to someone more senior.

Finally don’t be pressurised into making decisions – take time to cool down and think about things in the overall context of your financial statement.