Debt from mortgage shortfalls

We are mortgage debt specialists

The UK Insolvency Helpline are able to advise on all mortgage debt problems and mortgage shortfall debt claim problems. We recommend that you speak with our specialist advisors immediately if you are in debt due to having a mortgage shortfall on 0800 074 6918.

For detailed advice on debt from mortgage shortfalls please click on the following link: Mortgage Shortfalls Factsheet

If your lender repossesses your home, they'll sell it to get their money back. But if it sells for less than you owe them, they may want you to pay back the rest of the debt (the 'mortgage shortfall'). This is no longer a 'priority debt', which means your lender can't claim any more of your possessions or assets. But they can try to recover the debt for a long time - up to 12 years. This new section of the website gives advice about what to do if you're being asked to make up a mortgage shortfall.

If you can't meet your mortgage repayments, or you're worried you might fall behind, it's important to contact your lender as soon as possible. Lenders have procedures for tackling payment difficulties and they'll try to help. You can also get advice from other organisations. Mortgage lenders are keen to help their customers sort out any payment difficulties.

If you're struggling to make the payments and depending on your payment history and whether your difficulties are likely to be long or short term, your lender might agree to:

• reduce your payments for a set period
• charge you interest only for a while, if you've got a repayment mortgage (usually you pay capital and interest)
• give you a 'payment holiday'
• extend your mortgage term to reduce your payments

If you took out your mortgage on or after October 31 2004

The Financial Service Authority (FSA) regulates most mortgages taken out from this date. Under FSA rules lenders must treat you fairly and send you regular statements to keep you informed about your current arrears position. There are also rules covering what the lender must do if it intends to repossess your home.

• FSA guidance on mortgage arrears (PDF document, 58K)

Please click on the following link to read the guidance factsheet on dealing with mortgage arrears. The factsheet is designed to provide advice on dealing with a mortgage shortfall claims. The factsheet has been produced the national debtline team and provides guidance on dealing with mortgage arrears.

• A guide to debt following mortgage possession from the Council of Mortgage Lenders (CML) (opens new window)
• Plan your way out of debt
• Mortgage Interest Run On factsheet

Common questions arising from debt after a mortgage shortfall are the following:

• Long and short term credit - how can debt from mortgage shortfalls affect my credit rating?
• How do I prevent debt from mortgage shortfalls from affecting my dependants?
• I don't want to become bankrupt. Can I prevent debt from mortgage the shortfall causing this?
• If I consolidate my debt from a mortgage shortfall, would that be a wise move?
• Now that we property has been disposed of, how do we share the debts from a mortgage shortfall and sort out the bank accounts?

Please note if you are unsure of a debt situation in any other special situation and you are unsure if you are responsible for debt after a mortgage shortfall please call 0800 074 6918. We have team of money, debt and credit advisers ready to provide advice on responsibility for debts from mortgage shortfalls.

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