Missing A Payment

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So far I have no arrears on my mortgage. This is mainly because about four years ago I fell about three months in arrears and was then pressurised by the mortgage company to clear the shortfall in the shortest time possible. This meant me falling behind with other debts.In order to clear various utility bills it seems that I may have have to miss a month's mortgage payment.I expect the mortgage company will soon be on the phone to me asking when I'm going to clear the arrears.What real penalties will I face for falling one month behind.I have a regular salary, but unfortunately do not get the chance to do overtime or gain any additional income. I Know I will be able to pay back the shortfall eventually. I just don't want to be intimidated into paying before I can really afford to. Any advice?

-- Frank James (fmjam@msn.com), February 05, 2000


How much pressure you will face depends on who the lender is and the the terms of your mortgage. Some mortgages include terms to ramp the interest rate if you miss payments. Specialist lenders and mainstream lenders that practice "active arrears management" (eg Cheltenham & Gloucester Lloyds TSB) also cmoe down pretty heavily on customers who are late with one payment.

But all lenders write to you to ask what the Hell is happening when you miss a payment.

The Who Helps? section includes an arrears advisor form that will try to tell you how far into arrears you can get before your particular lender gets concerned. It does, however, only help for those lenders where we have information.

Hope this helps,


-- Lee (repossession@bigfoot.com), February 05, 2000.

I know that it can be very tempting to miss a mortgage payment to clear other items, especially as it is a large chunk out of your wage each month. But this really is not the answer.

If you haven't already done so, get in contact with the utility companies and explain the situation. If you have already gotten to the threatening letter stage, they will still be willing to set up an arrangement with you to pay rather than cut your services off.

Get on a direct debit/standing order arrangement with them. For British Gas and some electric companies you actually pay a cheaper price for your fuel if you pay by direct debit.

So long as you talk to each company, they will listen and are always sympathetic. You're not the first person to get into trouble with payments, and you certainly won't be the last.

Although you're monthly outgoings will go up slightly, this will be a far easier way to pay off your utility arrears than missing a mortgage payment.

Mortgage repayments are reported to the credit reference agencies each month. If you drop into arrears again, this will be reported and it won't look very good if you try to apply for credit elsewhere, or ever come to change your mortgage. This reporting doesn't happen with the utility companies. You may well be charged by the mortgage lender for writing and telling you that you've missed a payment, and unless you pay up in full the following month, you'll receive a letter telling you of the arrears and charging you for the privilege each month. The fact that you have been in arrears before may make a difference, it may not, its impossible for me to say.

If you have trouble meeting your monthly commitments as a whole, perhaps you need to look at the way you live and what your payments are and usually you will be able to cut expenses somewhere, even if its just for 2 or 3 months. If you shop in Sainsbury's go to Asda or Tesco's - something like that!!!

The fact that you have a regular salary is good, it will help you to budget. Not everyone has the chance for overtime as you say, but there is always the opportunity to gain additional income, its just a matter of being flexible and determined to get yourself out of a hole.

In my case, in addition to my normal job, I also sold Avon cosmetics in the evenings and worked at the weekend in a petrol station. Those few extra pounds each week went towards paying off my debts and it did really make a difference.

Good Luck!


-- pendle (pendle@amun-ra.demon.co.uk), February 05, 2000.

I agree with the above. it would be much easier to contact your utility companies and make a payment arrangment with them - after all they're not going to charge you for a late payment!! Once you've missed one mortgage payment it's going to be hard to catch up and before you know where you are you're getting bank charges left right and centre. I agree with the Direct Debit solution, but try and get them all taken out at the same time, around about when you get paid, that way if the money is sitting in your account, you won't be tempted to spend it.

It doesn't sound like your finances are in too much trouble, I think you just need to budget carefully and keep a close check. Good LUck

-- Joanne (joanne.deane@lineone.co.uk), February 15, 2000.

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