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Priority debts - mortgage arrears

The most urgent debts to deal with are the arrears on your mortgage. You should work out an offer of how much you can afford to repay each week. Use the Personal budget and repayments calculator to do this. If the amount left over after all your costs are taken into account is very small (or if you have no money left over at all), look at these two sections first:

If you still can't afford to make regular repayments, look at:

Once you've worked out how much you can afford, contact your lender (the bank or building society who gave you the mortgage) to explain your situation and make an offer of repayment.

Making an offer of repayment
First make an informal contact by telephone, and ask for their advice. They may ask to you to go and see them for a meeting to discuss the options, or to write to them explaining your situation.

If you go and see them take a copy of your personal budget and the letter with your offer of repayment. Otherwise, send them the letter and a copy of your budget by post.

You can use the Creditor letters activity to help you write your offer of repayment letter. Here's a sample letter to help you:


Anytown Building Society
1 The High Street
J. Markovitz and R. Balan
Flat 12, Royle Court
Park Drive
AN12 0AA

11 March 2003

Dear Sir/Madam

Account No. 0123456789

Since arranging our mortgage with you, our circumstances have changed and as a result we have been unable to make the last three payments. As a result our account is 616.00 overdue.

This has happened because Mr Balan has recently been made redundant and is now in receipt of Job Seeker's Allowance, reducing our monthly income.

We enclose a Personal Budget sheet which shows our total income from all sources, and our total outgoings. As you can see we have only 18.60 a week (80.60 per month) left for our creditors.

The offers we have made to our creditors have been worked out on a pro-rata basis, and we have written to all our creditors asking them to accept reduced payments.

In view of our circumstances, please would you agree an offer of 65.00 per month to repay these arrears? If interest or other charges are being added to the account we would be grateful if you would freeze these so that all payments made will reduce what we owe you.

Should our circumstances improve we will contact you again.

We would be grateful if you would send a standing order form to make it easier to pay you.

Thank you for your assistance. We look forward to hearing from you as soon as possible.

Yours faithfully,


Julie Markovitz and Rajesh Balan


Now you should know how much you'll be paying a week to pay off your arrears, or whether your monthly repayment on the mortgage will change. You can go back to your personal budget to put in the revised payments.

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