I can not pay my mortgage how can I avoid repossession

Many family incomes are falling or likely to do so Essential living expenses such as petrol and energy are increasing and Government cuts are threatening many incomes. Given this many people are finding themselves in a position where they are struggling with their mortgage payments and looking for ways to avoid repossession. This is especially the case if they have other debts such as credit cards, catalogues and personal loan payments to pay.

Is cutting your living expenses an option to avoid repossession?

At this time of year newspapers and magazines are full of money saving tips aimed at helping you budget and save money. However if you are struggling to pay your mortgage and trying to avoid repossession it is all to easy to simply say you must review your living expenses and cut back.

Of course this is important. However if you are running out of money before the end of the month and getting behind with your mortgage simply trying to spend less will not be enough to make a difference.

The answer is therefore to free up cash by reducing the amounts you are paying to your other unsecured creditors.

Reduce unsecured debt payments to avoid repossession

Clearly you will not have available funds to simply pay off chunks of your unsecured debt to bring the balances and therefore your monthly payments down. As such one option to protect your mortgage payments and avoid repossession is to use a debt management solution.

As a home owner the options available to you will normally be a Debt Management Plan (DMP) or Individual Voluntary Arrangement (IVA). Both allow you to reduce the payments you make each month to your unsecured debts. This then frees up the cash you need to pay your mortgage payments.

The option you choose will depend on your circumstances as both have various advantages and disadvantages. It is therefore important to understand all of these before making your decision.

Do not bury your head in the sand

The most important thing to do if you are at risk of getting into mortgage arrears is not to ignore the problem and hope it goes away. If you are struggling now your ability to maintain your mortgage payments and avoid repossession is likely to get worse in 2011.

Many incomes will be under pressure as the government spending cuts affect more and more public and private employers. Jobs may not be lost but you can be sure that overtime and bonuses will be cut.

VAT is also increasing in Jan adding an additional 2.5 percent to the cost of many living expenses items.Against this background, it is vital that you take action as soon as possible to free up cash for your mortgage. If you catch a debt problem early and implement the right solution, you can avoid getting into mortgage arrears and avoid repossession.