The first thing that a lender will do is to try to get you to agree to pay your arrears over a period of time at the same time as making your regular monthly repayments. They may try to make this easier for you by agreeing to accept interest only monthly payments or by lengthening the period of your mortgage - both of these will reduce the amount you have to pay each month. But on top of these payments you will have to start repaying your arrears.



So the cardinal rule is don't agree to pay back more than you afford, just to get the lender off your back. You will probably come under a lot of pressure to agree to pay more but never give in. This is because later, if you can't keep up these new repayments because they're unrealistically high or because something else goes wrong, you'll be in an even worse position as, in effect, you'll be defaulting for a second time. In the long run it's much better to stand firm and only agree to a repayment which you can comfortably afford.

Another option when faced with high levels of mortgage arrears is "sale-and-rent-back", sometimes known as "mortgage rescue". Around 50,000 people in the UK are thought to have entered into sale-and-rent-back arrangements, sold through hundreds of firms.

What happens is a commercial organisation buys your house and you repay your mortgage. Then you agree to rent the house from that organisation as a tenant. This allows you to remain in your home, but beware, it's fraught with problems.

Firstly the price you get is usually well below the true market value. Secondly, your security of tenure is often poor. There have been cases where the business that bought the property has stopped paying its mortgage and the lender to the business has repossessed the property and kicked the tennant out. This means that the vendors find themselves out of pocket and homeless, with little means of redress.

A report from the Office of Fair Trading (OFT) into sale-and-rent-back firms has highlighted some of the problems with these schemes. The report recommends better regulation of the companies to ensure the clear basis of property valuation and tenancy terms. The OFT also wants these companies to tell potential clients that thet should independent financial advice before proceeding to sign contracts.

A spokesperson from Which? the consumer organisation and publisher said: "People should steer clear of these sale and rent back schemes until they're properly regulated. At the moment if something goes wrong, you have no protection. The Government should implement the OFT's recommendations as quickly as possible."

If you find yourself in financial diffioculty and unable to maintain your mortgage repayments then you should speak to your mortgage lender and independent experts such as Citizens Advice, National Debtline, or the Consumer Credit Counselling. Service before considering other solutions. And remember, if you decide it's time to simply hand back the keys to your house and leave your mortgage lender in possession of your property, you will still be held liable for any shortfall if the lender fails to get all their money back. You may feel you've made a clean break but in practice your past will follow you.

So if you are experiencing these sorts of problems, get advice from a debt adviser. If your mortgage lender is left with a shortfall, a debt adviser may be able to get it written off.