When completing this statement use either weekly or monthly figures, but don't mix them and mark clearly on the statement which basis you have used.

• To change weekly figures to monthly, multiply by 52 and then divide by 12.
• To change monthly figures to weekly multiply by 12 and then divide by 52.

Annual payments such as TV licence, road tax, insurance premiums etc. should be divided by 12 to give the monthly amount or by 52 for the weekly figure.

Also allow for irregular, and often unexpected, expenditure such as car and house maintenance, repairs and replacements.

It is important to take everything into account, but don't include payments for arrears or secondary creditors at this stage because you need to know the total money you have available (if any) to make offers to them.

Before finalising your statement you must review your INCOME to see if it can be increased in any way and consider your EXPENDITURE to ascertain if any savings can be made.

Maximising Your Income

Be sure that you have included everything, and then consider if you can obtain any additional income. Possibilities might be:

• Job Seekers Allowance - if you are unemployed or have been made redundant.
• Child Tax Credit and Working Tax Credit - if you have children or if you are working but on a low income.
• Income Support - is available to people on low incomes and who meet certain criteria relating to work, sickness, age, savings etc. Check with your local Department for Work and Pensions (DWP) whether you are entitled to this.
• Incapacity or disablement benefits, including mobility or attendance allowance.
• Income Tax - check your code, particularly if your circumstances have changed, as you may be entitled to a rebate.
• Maintenance - are you entitled to this? Contact the Child Support Agency.
• Housing Benefit and Council Tax relief. Your local council can advise on eligibility for these.
• What about part-time work or taking in a lodger?
• Can grown-up children or non-dependants contribute towards the household expenses?

Seek help from the Department for Work and Pensions (DWP), your local council or Inland Revenue if you are not sure of your entitlement.

Income maximisation is a very important part of the debt resolution process and creditors will want to be reassured that you have considered all the options.

Review Expenditure

It is important to include all household expenditure and financial commitments in your statement, whether regular or irregular. Variable items such as fuel bills should be averaged out over the year and the use of budget plans, stamps or tokens may assist with this.

Creditors may challenge amounts spent on food, fuel, clothing, travel etc. so is there any way that you can reduce these to realistic levels in relation to the size and circumstances of your family? The cost of running a car may need to be justified against using public transport. For example, is it essential for travel to work, school, shopping etc. as other means of transport are not available? Leisure and holiday costs may also be challenged by creditors, along with expenditure on cigarettes, alcohol, lottery, pets etc.

Once again check your expenditure carefully to be sure that everything is included and all reasonable savings have been made. Try and make your expenses less than your income, otherwise your debts will continue to grow. However, do be realistic, as you may have to live on this budget for several years, so concentrate on reducing non-essentials rather than basics such as food and heating.

On completion of your income and expenditure review you can now finalise your financial statement before sending it to your creditors as part of your negotiations with them.

For more information on this topic, please visit the site store to order your SIGNED copy of Martin's book, 'Teach Yourself: Making Money From Property' available for just £9.99 plus P+P.

Alternatively join me and my team on one of my Special 3 day Property Training Weekends, when we'll teach you what you need to know to become successful as a property investor or developer - and help you avoid costly mistakes.