Mortgage arrears

The links on the right will take you to a number of mortgage arrears guides which may help you:

• identify which are the most important debts that you need to tackle first such as your mortgage, council tax, gas water and electricity charges
• work out a personal budget for your household to help you decide how much you can afford to pay to each of the people you owe money to
• identify strategies that you can use to tackle your mortgage arrears problems.

Basic rules when faced with arrears
Always contact your creditors (the people you owe the money to) and let them know that you are having difficulties. They may be able to help you draw up affordable proposals for paying off the arrears.

When contacting your creditors, if the first person you speak to is unhelpful, ask to speak to somebody more senior and make sure that you contact everybody you owe money to.

Don't ignore letters and telephone calls from your creditors. The problem won't just go away. It will get worse the longer you ignore it.

Don't borrow more money to pay off your debts without first thinking very carefully about it. Borrowing more money may only get you further into debt and if you take out a loan from a loan/finance company you may be charged very high rates of interest storing up further trouble for the future.

Decide which of your debts are the most important and make sure that you tackle these priority debts first. Priority debts are usually those which can mean losing your home, having your gas water or electricity disconnected, or going to prison. Once you have made offers to repay your priority debts if you have any money left over you can allocate this to repay any other remaining debts. The offers you make to repay your debts may need to be linked to the amount of money you owe on each of your debts.

Always reply to letters from the court and try to attend all court hearings so that you can give your version of events and also make sure that the court is fully aware of your financial situation.

If you attend the court hearing and make an offer to repay the arrears within the remaining term of the mortgage the court may consider this to be a reasonable offer and order the mortgage lender to accept it.

Sometimes as a last resort you can also ask the court for time to sell the property yourself if you can prove that your home is worth more than the sum outstanding on the mortgage.