If you are not able to contribute to your mortgage to help pay off your arrears at all, you will need to increase your income. Here are some ideas to help you:

• See if you can reduce your total monthly outgoings.
• Find out if you are entitled to any benefits you are not receiving.
• Take on a tenant or a lodger
• Sell your existing house and move to a smaller and/or cheaper one. You would need your lender's agreement to do this, but if they think it will help them get their money back they will probably agree. Although this will help pay off some debt, some of the capital released will go in estate agent fees, legal fees and stamp duty. This option will only work if the property is worth much more that the mortgage, - if you're in a negative equity situation, or house value and outstanding mortgage are roughly equal, downsizing won't help. You also need to take into consideration that rented accommodation will only cost less per month than the mortgage payments if the rented place is a lot smaller or in a cheaper area than the present property.

Repossession

If you have mortgage arrears, it is likely that no action will be taken until 3 monthly payments have been missed. You will not necessarily lose your home, even if your lender has started possession procedures. The process can easily be stopped right up until the last minute. Send a letter with a copy of your financial statement to your lender, and if applicable, the court including the case number at the top. Make sure everyone knows you have taken the first steps to resolve the problem.

If you have a tremendous amount of arrears to pay, you may be tempted to hand over your house keys to your lender, walk away, thinking all your troubles will now be over. However, it's not quite as simple as that. The lender will take possession of the house and sell it, probably at a lower price than you could get yourself, adding on a whole array of extra charges for doing that. They will then go on pursuing you for any difference between the outstanding debt (including the extra charges) and the proceeds of the sale of the house. This means that you will be worse off than if you had stayed in the house until the lender went to court asking for repossession, and you'll be without a roof over your head in the meantime.

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