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Financial difficulty

Please don't ignore the problem.

There are different options you can choose from if you are having problems paying your mortgage and bills. This section explains what you should consider and the actions that we'll take to help you.

Firstly, don't ignore the problem. Call us on 0345 602 2828 as soon as possible if you are having issues paying your mortgage. You should also contact us if you think that you may be in financial difficulty in the near future.

Steps you should take:

  • If you're struggling with your financial commitments, you should pay all your essential bills first, such as your mortgage, utility bills (electricity, gas, water), insurances and council tax. You should pay these bills first, before making any payments towards your credit card or loan.
  • Check whether you can get any state benefits or tax credits which could help to increase your income.
  • If you have an insurance policy (i.e. income protection) check if it can help you with your payments.
  • You can contact Citizens Advice for debt advice if you need help managing your finances.
  • Make sure you tell all joint mortgage holders and your guarantor (if you have one) what is happening.
  • Get back to us as soon as possible if we contact you to discuss your mortgage.

If you have fallen behind with your payments -we will do the following.

We will:

  • Try to contact you as soon as possible to discuss how we can help.
  • Give you a reasonable period of time to pay back the debt.
  • If you like, we will talk to an agency, such as Citizens Advice which gives debt advice.
  • Offer to send a representative of a third party to your home to talk through your finances.
  • Try to set up a new payment plan with you, considering both your interests and our responsibilities. If a plan is agreed, it is important that you keep to it - or you tell us if there is a change in your situation that may affect the plan.
  • Offer to change the method by which you make your payments or the date on which you make them.
  • See if we can allow you to pay back your mortgage over a longer time, to reduce your monthly mortgage payments.
  • See if we can change the type of your mortgage and whether this will reduce your monthly repayments.

If we can't offer you any of the options above, we'll tell you why. If we're able to offer one or more of them, we'll explain how each option would work and give you time to consider it.

You may wish to talk to an independent adviser before you change your mortgage arrangement. We recommend that you seek independent, free, debt advice from a lawyer or third party company.

Costs and charges

If you fall behind with your mortgage payments, we may charge you administration and legal fees. We'll tell you the amount you'll have to pay.

Legal proceedings

If we can't agree on a solution with you to clear your arrears, we may go to court to start the process to repossess your home. If this happens, we recommend that you visit the court to discuss your case. In addition, we also recommend that you seek independent debt advice.

The start of court proceedings doesn't necessarily mean that we'll repossess your home. We'll keep trying to solve the problem with you. Repossession is a last resort.

If your home is repossessed we will advise you to contact your local authority to see if they can find you somewhere else to live.

If your home is repossessed

  • We'll sell it for the best price we can reasonably achieve.
  • We'll try to sell it as soon as possible.
  • We'll give you reasonable time to take your possessions from your home.
  • We'll use the money raised from selling your home to pay all loans and charges secured by your mortgage.
  • If there's any money left over, we'll pay it to you.
  • If there's not enough money from the sale to pay off the entire mortgage, you'll still owe us the amount that is left over (a shortfall debt). We'll tell you what this is as soon as possible.
  • If you bought your home with other people, each of you will be responsible for all the money borrowed. This is the case even if you only pay part of the mortgage.
  • We'll take a look at your income and outgoings when trying to set up a suitable payment plan for you to pay back the debt.
  • If we can't arrange a plan, we may go to court to recover the money, and you might have
  • If we can't arrange a plan, we may go to court to recover the money, and you might have to pay additional court costs.
  • If a shortfall debt is not paid, it could affect whether you're able to get credit in future.

Complaints

If you think that we've not treated you fairly dealing with the arrears on your mortgage, please talk to us and let us know what the problem is. We will try to resolve your complaint as soon as possible.

If, after going through the complaints process, you're still unhappy, you can refer your complaint to the Financial OmbudsmanService (The Financial Ombudsman Service is only available once you've received the final letter of response from us, or if you've not received a final response within 8 weeks after raising your compliant). The Financial Ombudsman Service provides a free and independent service for consumers, and can be contacted at:

Financial Ombudsman Service
Exchange Tower
London
E14 9SR
Phone: 0800 023 4567 or 0300 123 9123
Email: complaint.info@financial-ombudsman.org.uk

You should also bear in mind

Some companies may offer you new loans or even invite you to sell your property to them and then rent it back. Please be careful, as this may not be in your long-term best interests. We advise you to seek independent advice before entering into these type of arrangements.

You may be thinking about handing your keys over to us. If you do this, you'll still owe Birmingham Midshires any outstanding debt, and we advise you to discuss this option with us first before taking such action.

Debt management companies can only operate if they are authorised by the Financial Conduct Authority (FCA) and some firms will cease to be authorised by the FCA from 1st January.

If you have used a debt management company to arrange a debt management plan and this company is no longer authorised:

Don't Worry.

Free debt advice is available to help you decide on what to do next. More information can be found below, or you can visit the Money Advice Service.

Act Quickly.

Please contact us as soon as possible, so we can help you. We will give you time to sort out a new plan with another debt management company. Please remember, during this time you are still responsible for paying your debt.

A list of authorised firms is available for you to view on the FCA website.

FSCS – protecting your money. Find out more here.

Gross rate means that we will not deduct tax automatically from your interest. You are responsible for paying any tax due to HM Revenue and Customs.

AER means Annual Equivalent Rate. AER illustrates what your interest rate would be if interest was paid and compounded each year and allows you to easily compare different offers.

Tax free is the contractual rate of interest payable where interest is exempt from income tax.

For telephone line opening times, please read the information in our contact section. Calls may be monitored and recorded for security and training purposes. If you're calling from outside the UK, please dial +441902 428 311.


© Birmingham Midshires
This site is intended for UK residents unless otherwise stated.
Birmingham Midshires is a division of Bank of Scotland plc which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628. Registered office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland No. SC327000.
To contact the FCA Consumer helpline, please ring 0800 111 6768. Alternatively call the Money Advice Service on 0300 500 5000 or visit www.moneyadviceservice.org.uk.