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Facing financial difficulty

Please don't ignore the problem.

If you are having trouble paying your mortgage, there are a variety of options available that may ease your situation and ultimately help to resolve the issue. This section explains the things that you should consider and the actions that we will take to help you.

Steps you should take to help

  • Pay all your essential bills first, such as your mortgage, utility bills (electricity, gas, water), insurances, council tax and housekeeping. You should ensure that you pay these essential bills before making any payments towards credit cards or loans.
  • Check whether you can get any state benefits or tax credits which could help to increase your income.
  • If you have an insurance policy, such as income protection insurance, check whether this could help with your payments.
  • Seek debt advice, such as from Citizens Advice, Step Change Debt Charity or National Debtline if you'd like help with managing your finances.
  • Make sure you keep all joint mortgage holders, and anyone acting as a guarantor on the mortgage, up to date with what is happening.
  • Get back to us quickly if we try to contact you to discuss your mortgage.

If you have fallen behind with your payments – we’ll do the following;

We will:

  • Attempt to contact you as soon as possible to discuss your circumstances.
  • Give you a reasonable period of time to pay back the debt.
  • If you’d like us to, we can talk to an agency which gives debt advice, for example Citizens Advice, Step Change Debt Charity or National Debtline.
  • Complete a financial assessment.
  • Offer to send an external field agent to see you to discuss your financial circumstances.
  • Attempt to arrange a new payment plan with you, taking both your interests and our responsibilities as the lender into account. If a plan is agreed, it is important that you keep to it - or you tell us if there is a change in your circumstances that may affect the arrangement.
  • Offer to change the method by which you make your payments or the date on which you make them.
  • See whether we can allow you to pay back your mortgage over a longer period of time to reduce your monthly payments.
  • See if a change to the type of mortgage you have is available to you and whether this will suit you.

If we cannot offer you any of the options above, we will tell you why. If we are able to offer one or more of them, we will explain how each option would work and give you time to consider it.

You'll speak to our mortgage team who may be able to offer solutions suited to your personal circumstances but you can seek help from other professionals, such as an external field agent or a lawyer, before you change your mortgage arrangements. Please note this could incur additional costs.

We would strongly advise that you seek independent, free, debt advice.

Interest Only

For 'interest-only mortgages' you have to make monthly payments at a level that pays the interest only. At the end of your mortgage term, you must make a lump-sum payment to pay off everything else you owe, including repaying your mortgage loan.

If the balance on your Interest Only mortgage increases, we will add this on an interest only basis, and you will need to make sure your repayment plan is enough to repay the balance due in full when the term ends.

If you're worried about paying back the amount you owe, give us a call on 0800 056 2980 so we can discuss your options and help you decide what's best for you.

Your options may include:

  • Transferring all or part of your mortgage to repayment over a term you can afford. This is subject to criteria and an affordability assessment.
  • Making overpayments to reduce the amount you owe and the interest you pay on your mortgage because we calculate interest on the reduced balance. Sometimes you may need to pay an Early Repayment Charge we can check if this applies to your mortgage.
  • Selling your home.

Information to have when you call to discuss your interest only mortgage

Having details of your income and expenditure to hand when you call will save you time and help us better understand your situation:

  • Details of your income - this should include your salary, overtime, guaranteed bonus plus any other income such as a pension or state benefits.
  • Details of your expenditure - this should include payments you make towards any creditors such as credit cards and loans, property related expenses and other regular committed expenditure.
  • If you're contributing to a pension fund - details of your anticipated retirement income which you can find on your latest pension forecast statement.
  • If you're self-employed - information from your last 2 years' Tax Calculations, previously known as SA302, from HMRC, the type of contract you're on and how much of the company you own.

Costs and charges

We may charge additional costs we incur, such as legal costs associated with legal proceedings. We’ll tell you the amount you will have to pay.

Legal proceedings

If we cannot agree on a solution with you to clear your arrears, we may go to court to start proceedings to repossess your property. If proceedings take place, it is strongly recommended that you attend the court and that you seek independent debt advice. The commencement of court proceedings does not necessarily mean that we will repossess your property. We will keep trying to solve the problem with you. Repossession is a last resort.

If your home is repossessed, we will give you advice about getting in touch with your local authority to see if they can find you somewhere else to live.

If your home is repossessed

  • We will sell it for the best price we can reasonably achieve.
  • We will try to sell it as soon as possible.
  • We will give you reasonable time to take your possessions from your home.
  • We will use the money raised from selling your home to pay all our loans and charges secured by mortgage. We will pass on any remaining money to whoever is next entitled.
  • If there is any money left over,We will pay it to you as long as there is no money owing on a mortgage on the property with another lender, ranking after the one with us.
  • If there is not enough money from the sale to pay off the entire mortgage, you will still owe us the amount that is left over (a shortfall debt). We will tell you what this is as soon as possible.
  • If you bought your home with other borrowers, each of you will be responsible for all the money borrowed. This is true even if you normally only pay part of the mortgage.
  • We will take account of your income and outgoings when trying to arrange a suitable payment plan for this shortfall debt with you.
  • If we cannot 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 are able to get credit in future.


If you think that we have not treated you fairly in dealing with any arrears on your mortgage, first please talk to us and let us know what the problem is. The chances are that your complaint can be quickly resolved by the area you are dealing with - so please contact them first on 0808 145 0372.

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

The Financial Ombudsman Service
Exchange Tower
E14 9SR

0800 023 4567 (free from a landline) or 0300 123 9123 (charged at the same rate as 01 or 02 numbers on mobile phone tariffs). Lines open Mon-Fri 8am-8pm Sat 9am-1pm.

Other issues

Some companies may offer you new loans or even invite you to sell your property to them and then lease it back as a way of resolving your short-term financial difficulty. Please be careful, as such actions may not be in your long-term best interests. We advise you to seek independent advice before entering into any arrangement of this type.

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

Useful links

For telephone line opening times, please read the information in our contact section. Calls may be monitored and recorded for security and training purposes.

Our tracker rate mortgages are linked to Bank of England Bank Rate (also known as Bank of England repo rate). Details of this rate can be found on the Bank of England website or in the Financial Times or other leading newspapers.

Security and privacy policy

© Birmingham Midshires

This site is intended for UK residents unless otherwise stated. Mortgage Loans will be made by Birmingham Midshires.
Birmingham Midshires is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh, EH1 1YZ.
To contact the FCA Consumer helpline, please ring 0800 111 6768 or visit MoneyHelper.