01793 616677
Society of Professional
Mortgage Arrears

The voice for the profession of
        Mortgage Arrears Counselling


If you can't meet your mortgage repayments, or you're worried you might fall behind, it's important to contact your lender as soon as possible. Lenders have procedures for tackling payment difficulties and they'll try to help. You can also get free independent advice from other organisations.

Contact your lender and agree a plan

Mortgage lenders are keen to help their customers sort out any payment difficulties. Also, the law says they must treat you fairly and take your circumstances into account. They may be able to come to a payment arrangement with you.

If you're struggling to make the payments

Depending on your payment history and whether your difficulties are likely to be long or short term, your lender might agree to:

If you're already in arrears

If you've already fallen behind, your lender will suggest a way to pay off the arrears gradually, alongside your usual payments. If you can't meet the extra payments, you may be able to delay them for a while or add them to your loan. Again, it depends on your track record.

Always pay what you can

Pay as much as you can manage every month. Keeping up regular payments (even if they vary) shows that you're committed. Your lender's more likely to treat you sympathetically and you'll minimise the arrears charges too.

If you don't keep up your repayments

It's very important that you don't ignore any payment problems. Mortgages are 'priority debts', which you should pay off first as your lender could repossess your home and sell it to get their money.

Working out how much you can afford

Your lender can help you work out how much you can afford, but you may prefer to do this yourself. A good starting point is to write down all your income and outgoings (apart from the mortgage) and see what you've got left. The Financial Services Authority (FSA) has an online budget calculator you can use. You are also encouraged to seek independent money advice from a recognised free to client provider who will help you develop a realistic income and expenditure budget.

If you've lost your job or can't work because of illness

If you've lost your job or you're too ill to work, check whether you've got 'mortgage protection insurance' to cover your payments. The insurance payments may not start straight away - so contact your insurer as soon as possible.

Benefits that might increase your income

It's worth checking if you're entitled to benefits such as Working Tax Credit, Child Tax Credit or Council Tax Benefit. They can make a real difference to your income and help with your mortgage payments.

Organisations that can give you free advice

You can get free independent advice about mortgage difficulties from several organisations. They'll help you work out what you can realistically afford.

Citizens Advice Bureau (CAB)

The CAB offers free, confidential advice face-to-face or by phone. Most CAB bureaus also offer home visits and some give email advice, visit www.adviceguide.org.uk to get details of your local office and free factsheets.

National Debtline

National Debtline is a free, confidential service that gives independent advice about coping with debt. You can get information online at www.nationaldebtline.org or call the helpline on 0808 808 4000 (9.00am to 9.00pm Monday to Friday, 9.30am to 1.00pm Saturday). Borrowers can also email queries and request free factsheets.

Consumer Credit Counselling Service (CCCS)

CCCS offers free counselling on personal budgeting and advice about using credit. You can call their helpline free on 0800 138 1111 (8.00am to 8.00pm Monday to Friday) or online counselling and information at www.cccs.co.uk.

Community Legal Advice

Community Legal Advice offers free information about legal problems and can put you in touch with local advisors. You can get information online or call the helpline on 0845 345 4345 (9.00am to 5.00pm Monday to Friday).


Offers help with housing, mortgage, debt and welfare benefit problems. Call free on 0800 800 4444 or for Mortgage Debt Advice call 0300 33 00 515 or visit www.shelter.org.uk/adviceonline


Provides advice on debts including mortgage debts including advice on assisted voluntary sales. Call 0800 917 7823 or visit www.payplan.com

National Homelessness Advice Service (NHAS)

If you are worried about your mortgage you can obtain information and guidance on line at www.nhas.org.uk

Mortgage shortfalls after repossession

If your lender repossesses your home, they'll sell it to get their money back. But if it sells for less than you owe them, they may want you to pay back the rest of the debt (the 'mortgage shortfall'). This is no longer a 'priority debt', which means your lender can't claim any more of your possessions or assets. But they can try to recover the debt for a long time - up to 12 years. The National Debtline website gives advice about what to do if you're being asked to make up a mortgage shortfall.


There are a number of formal insolvency procedures that maybe available to you. These could be particularly relevant if you have significant debts in addition to your mortgage arrears. The main procedures are: -

Bankruptcy - A formal procedure where an Administrator is appointed to run your financial affairs, and return any monies outstanding to your creditors, this can involve the sale of your home, attachment of earning order, and closure of all bank accounts.
Individual Voluntary Arrangement - This is typically a 5 year plan that is put in place to maximise returns to your creditors, but at a fixed monthly repayment with part of your debts written-off, however after the 4th year your home will be re-valued and any extra monies paid to your creditors.
Debt Management Plan - These are informal payment arrangements whereby you will generally repay the full total of the debt owed but generally over an extended period of time. These will be formalised in England and Wales starting April 2009.

All formal insolvency procedures have significant implications on you personally and on the assets you own. Therefore, before seeking to enter any of these procedures, you should seek professional advice to ensure that you are fully aware of the implications.