Mortgage arrears

If you have mortgage arrears, they are probably your most important debt as the loan is secured against your home.

Could I get help with mortgage payments?

It is important to pay your full mortgage instalments if you possibly can, but contact your lender if you cannot. Depending on your payment history, how long your difficulties are likely to last and how much equity your home has, your lender may be able to suggest a way to help you through a difficult period.

How much should I offer to pay?

Your offer should cover the full monthly mortgage instalment and an amount towards the arrears. Aim to clear them as soon as possible but do not offer more than you can afford.
If your lender takes court action, the lowest payments a judge can order is the full monthly instalment plus an amount that would clear the arrears by the end of the mortgage. The lender however is unlikely to accept such a low offer. A judge is likely to consider a long period only if you cannot clear the arrears sooner and your home is worth more than the mortgage.


What if my lender does not accept my offer?

Show them a copy of your financial statement and pay the offer anyway. You cannot be evicted without court action and the judge may agree to your offer.


Should I sell and rent back my home through a private company?

These are known as Sale-and-Rent-Back schemes. The Financial Services Authority has stopped several of them from operating because they treated customers unfairly. If you are considering one of these schemes, think carefully and get advice.


What happens if my lender takes court action?

Your lender can start court action only after your mortgage has fallen two months into arrears and they have looked at whether there are ways they could help you.
If your lender starts court action, the court will send you a claim form with:
  • the time and date of the hearing
  • information about the lender’s claim
  • a defence form for you to complete.
Complete and return the defence form, offering the amount you worked out on your financial statement.  If any of the information on the lender’s claim was wrong, explain this on the defence form. If you are not already paying your offer, start now.

If your home is worth more than your mortgage, get it valued before the hearing and take a written valuation if you can.  This is particularly important if you are asking the court to let you pay off the arrears over a long period.

Do I need to go to the hearing?

Yes, whether or not you have returned the defence form or reached an agreement with your lender, go to the hearing. Take a copy of your financial statement and any papers, including proof of income, the court might want to see.

What happens at the hearing?

Hearings do not usually last long, perhaps five or ten minutes. The only people present will be you, your representative if you have one, the judge and the lender’s representative.
Do not interrupt anyone. The judge will give you your chance, after the lender's representative has spoken, to say how you plan to clear the arrears. They may ask why the arrears happened and how you will be able to afford the payments that you are offering.
At the end of the hearing, the judge will make one of the following orders:
  • Adjourn the hearing to a later date, usually because more information is needed.
  • Adjourn generally, usually because the arrears are small and you can clear them over a short period. No possession order is made and no date is set for a further hearing. If you miss a payment, your lender can ask the court for a further hearing.
  • A suspended possession order, usually because you can afford to clear the arrears with set payments over a reasonable time. A possession order is made but, as long as you make the payments ordered, you will not be evicted for the arrears.
  • A possession order, usually because you are not at the hearing or you cannot afford to clear the arrears over a reasonable period. This means that after a set period, usually 28 days, your lender can ask the court for a date to evict you.

If you are ordered to make payments

Can I pay more than the payments ordered?

Yes, it is best to clear the arrears as soon as you can. You are paying interest on them and you do not know whether you will have other financial difficulties in the future.

What can I do if I can no longer afford the payments ordered?

Ask the court to reduce the payments ordered. Get form N244 online or from the court, complete and hand it in at the court. To visit Bow County Court, you will need to make an appointment by calling the court on 020 8536 5229 between 10am and 2pm on a weekday. You may have to pay a fee when you hand in the form. Continue to pay your mortgage each month, with as much as you can off the arrears. Contact your lender and ask them to agree to your reduced offer. There will be a court hearing and it is important that you go, whether or not your lender has agreed to your reduced offer.

What happens if I do not keep up the payments ordered?

Your lender can ask the court to send their bailiffs to evict you. Normally you will receive a letter telling you the date of eviction.
You can ask the court to stop the eviction and give you time to pay the arrears. Get form N244 online or from the court, complete and hand it in at the court.

To visit Bow County Court, you will need to make an appointment by calling the court on 020 8536 5229 between 10am and 2pm on a weekday. You may have to pay a fee when you hand in the form.

You will be given a time and date for the hearing. If you do not attend, you will be evicted on the set date. The judge may stop the eviction if:
  • there is a good reason why you did not make the payments ordered and
  • you can now pay your mortgage plus an amount that clears the arrears in a reasonable time.
If you are sorting out debt problems, start at the beginning of this guidance, otherwise you may miss valuable information. 


If you have lost your job or are sick and can claim on mortgage protection insurance, do so within the time limit. If the insurer will not pay, look at the Financial Ombudsman Service web site to see whether you might want to complain.


Get information from the Financial Ombudsman Service on mortgage protection insurance


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