The fog has not lifted here all day.  It is difficult to see very far ahead and you feel like you are the only person in the world, apart from the phone calls.

 

This is a true description of the weather, but it could equally be a description of the desolation and desperation felt if you have mortgage arrears.

 

You feel like you have let yourself down.  And when you turn your back, your lender has helpfully whammed on some charges and you now owe twice what you thought you owed.  Hopeless.

 

No, it is not hopeless.  Stop paying your credit cards, loans catalogues and all that other stuff. They can make your life hell but they cannot chuck you out of your home.  Don't worry, they threaten to take you to court but they won't - they can't afford it.  They can wait a couple of months whilst you sort out your arrears.  They won't like it, but they are not a priority - your mortgage is.

 

Do pay your council tax, TV licence and  car loan.   Cut down on food, utilities and everything else for 3 months.

 

Now concentrate on your arrears.  Find out, by calling your lender, exactly how much your arrears account is.  If you can find the entire amount by selling the car, borrowing from someone or emptying all your savings accounts, then pay the arrears off, before they morph again into and even bigger amount.

 

If you cannot chuck a large amount at the arrears then get a calculator.

Divide the amount owed by 6 - can you afford to pay this amount on top of your mortgage?  No?

Divide the amount owed by 12 - can you afford this on top of your mortgage?  No?

Divide the amount owed by 24 - can you afford this on top of your mortgage? No?

Divide the amount owed by 36             and so on, the maximum number of months being the months remaining within the terms of the mortgage, eg 10 years x12 = 120 months to divide the arrears by.  This is not a popular option with the lender who would prefer you to pay your arrears back in 6 - 18 months.

 

Whatever amount you can genuinely afford on top of your current monthly payment, put it in writng to your lender as an arrangement.  Best to put it in writing and then they have to respond in writing.  Then everybody knows where they stand, and you don't have to hear the dispproving tones of someone on the phone.  They haven't got the authority anyway, so you might as well put it in writing.

 

This is an informal arrangement with the lender.  If you are more than 3 months in arrears your lender might want to court to set up something similar but under a suspended Possession Order.  This means you are under the court, so if you default, the lender will apply for a warrant of eviction.

 

All this buys you time.  It will only solve your arrears problem if you can stick to it.  If you do not really think you will be able to stick to it, then you might need to think about selling your property.

 

Arrears need urgent and proper handling.  No good paying £500 this month and nothing next month.  Better to pay £30 a month and stick to it every month.  Remember computers deal with it, then humans, well, lenders.  So if you make regular payments, the computer is happy.  If you miss a month, the computer tells the human.

 

Arrears are more important than yammering debt collectors.  Mortgage arrears matter.  Repossessions are all about arrears, most people losing their house for the price of a second hand car.  You need to be cleverer than that.