First, prioritize your debts or rank them in terms of the ones that can give you the most trouble the quickest. If you?re three months behind on your utility bill and the company is threatening to cut off your power, you should deal with this debt first.

Second, be sure to keep an accurate log of all phone conversations with creditors and copies of all correspondence.

This way, you will have a good record of what?s going on, to whom you spoke last, the date of that conversation and its result. It?s not uncommon for large corporations to have different people or even different departments contacting you about late or missed payments. If you keep accurate records, you will always be able to defend yourself against the claim that you have been unresponsive or uncooperative.

It?s kind of human nature to want to run away and hide from creditors. But it`s better to be aggressive. If you know you are not going to be able to meet a mortgage or credit card payment, call the company before the payment is due. Tell the company?s representative why you are having money troubles. Be sure to give a real reason for your problems such as a divorce or loss of a job, and not just some feeble excuse.

If you can give your creditors a real reason for being in financial trouble, you may find that they are sympathetic and willing to work with you.

Your next step is to arrange a payment plan. When you contact your creditors? representatives, explain that you know you are behind in your payments but that you want t make a payment arrangement. Let them know what you can afford to pay this month and the next. Make certain they know you intend to make full payment eventually.

You might also see if one or more of your creditors would be willing to let you skip a month?s payment. Be sure to get all payment plans in writing. If the company?s representative does not volunteer to mail you the plan in writing, send a letter requesting that he or she do so. Calculate just how much you can afford to pay a creditor before contacting the company. Then, do not agree to pay any more than this, no matter what the company demands. It may take a number of phone calls before the company agrees to a reduced payment. If the company keeps saying ?no? to your offer, keep calling until you get a different answer. Or ask to speak to the representative?s supervisor as he or she may have more authority to work out a plan with you.

Finally, always try to negotiate. Your landlord may be willing to let you miss a payment now if you make it up at the end of the lease.

If you have a mortgage, ask your lender if they would take a 60 percent payment now with the promise to make this up over the next few months. If you will be paying late, explain the circumstances and ask that at least they waive the late fees.

If you are having trouble paying for your utilities, see if you can switch to a budget plan or set up a partial payment plan. Most utilities will not cut off your service so long as you are making some kind of payment.

You could sell your car and purchase a cheaper one if a car payment is a problem. If you?re going to make a late payment, be sure to let the lender know in advance. Otherwise, you might find your car has been repossessed. You might ask for an extension of the loan. For example, if you have 36 months left to pay, you might ask to extend this to 42 months in return for lower monthly payments. And if you are leasing a car, see if you can terminate the lease early. All the leasing company can say is ?no.?

Being in serious debt is never any fun. But if you tell your creditors what you will do and then do what you say, things will get better.