How to make a debt repayment plan

• Determine how much you can afford to pay, in total, toward your debts each month. For our purposes, we're using the £125 figure (remember, the figure is irrelevant, it's the process that counts).
• List all your creditors and the amount you owe each one.
• Add up the debt.
• With a calculator, figure out each creditor's share, or percentage, of the total. Divide the amount you owe each creditor by your total debt and that gives you that creditor's percentage.
• Each monthly payment to each creditor will be figured on the basis of the percentages you worked out with the formula. For example: Visa's debt is 60 per cent of your total debt. Visa will get 60 per cent of £125 a month, or £75 a month. The total you owe your brother is five per cent of your total debt. You'll pay him £6.25 a month.

The key is to stick to the plan. Don't be pressurised into paying more than you can afford or forced into paying off one aggressive creditor over the others. Most legitimate creditors will be appeased when you prove that you are taking steps to repay their debt.

A final, uplifting note: It may seem that it's going to take you forever to pay off your total debt but you'll probably find that once you have taken control, your money troubles won't be quite so scary.

Quick checklist:

1. Figure out how much money you have coming in
2. Track your expenses
3. Create a realistic spending plan
4. Figure out how much you can pay towards debt
5. Repay your creditors proportionally
6. Keep the faith

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