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For many of us 2008 hasn’t got off to a great start; according to The Council of Mortgage Lenders repossessions rose by 21% last year - as the affects of the credit crunch began to take hold - and Britain’s financial regulator recently warned that over one million families are at risk of losing their home in the coming 18 months; with rising interest rates and higher fuel bills cited as major contributing factors. The Bank of England responded last month with a quarter percent reduction in the base rate, but thousands of people still find themselves struggling to meet their financial commitments. What then, to do, if you find yourself unable to meet your monthly mortgage or rent payments?

Mortgage arrears

• Act quickly - the longer you leave it the more difficult it will become to tackle your arrears.

• Get independent advice - an independent advisor can help you to look at a range of options and put together a reasonable and affordable repayment plan. Contact National Debt Line or look for a similar service in your local area.

• Talk to your lender - paying your mortgage should be your top financial priority, most lenders will expect you to come up with some kind of affordable repayment plan so have all your up-to-date income and expenditure details to hand.

• Look at ways of reducing your monthly repayments. You’ll still have to pay the total sum borrowed back but depending on your circumstances you may be able to: take a ‘payment’ holiday; add the arrears to your mortgage; extend the number of years you have to pay back your loan; or, if you’re on a variable rate, switch to a cheaper fixed-term mortgage.

• If you have a repayment mortgage talk to your lender about switching to an ‘interest only’ mortgage, even if it’s for a short period of time. On a typical £180,000 mortgage you’ll reduce your monthly payments from £1,173 to £898 at current rates.

• In the meantime - pay what you can. Making regular payments (even if they vary) shows that you’re committed to reducing arrears, which in turn will make your lender more inclined to act sympathetically.

• If you’re in arrears due to a change in circumstances (such as redundancy or marital breakdown) check if you have a mortgage payment protection, you may find it’s included in your monthly repayments.

• Check the Government website to make sure that you’re not missing out on any benefits, such as family tax credit, that you’re entitled to.

• Look at ways of boosting your earnings - if you have room, consider taking in a lodger until your arrears are cleared (be sure to check with your mortgage lender first), shop around to reduce your insurance costs and other utility bills and cut back on non-essential spending.

• For more information on mortgage arrears contact you local Citizen’s Advice Bureau or the Debt Free Helpline - both offer free advice.

Rent difficulties

It’s not just home-owners that get into difficulties, private renters also risk losing their home if they fall behind with their rent payments. So if you are struggling to pay your rent:

• Take immediate action - ignoring the problem could result in eviction.

• Speak to your landlord - it’s better to be honest if you’re experiencing difficulties in paying the rent, you may be able to come some affordable agreement to pay off any arrears accrued.

• Any repayment plan needs to be put in writing and agreed by both yourself and your landlord. The Citizen’s Advice Bureau or the Debt Free Helpline may be able to help you determine a practical amount and liaise with your landlord.

• Make sure you’re getting any benefits you’re entitled to, especially housing benefit.

• Get independent advice. Depending on the type of tenancy you have you may have some protected rights against eviction.