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What Happens if I get Ill and can't Pay My Mortgage?

By: Christine Whitfield BA (hons) - Updated: 27 Jun 2010 | comments*Discuss
Ill Illness Mortgage Debt Self-employed

If you work for a company and get ill there are provisions in place to ensure you are paid for at least some of the time you are ill. By handing in doctors notes you are usually paid a full wage for several months before receiving half pay. However what happens if you are self-employed? If you only earn for the time you are working then an illness that puts you out of work for a considerable amount of time can seriously affect your finances. But what can you do? The answer is simple: talk.

Talk to your Lender

First and foremost talk to your mortgage lender. It can only help if it knows what is going on. Explain your situation and tell the when you hope to be back working. They may be able to arrange a payment holiday or at least a reduction in your payments. If you do not tell them they will not look kindly on you missing payments. It is best to be straight with them and see what help they can offer.

Talk to your Creditors

Similarly, talk to any providers you pay for example the gas company, electricity company and phone service provider and tell them your problem. If they are aware of your situation they may be able to organise repayment vehicles that are more convenient to you at the present time.

Talk to your Bank

You bank can also be helpful. If you contact your bank and explain what is going on they may be able to provide you with a loan or overdraft increase to help you through the difficult time. An increase in your overdraft may provide you with the extra cash you need to meet your mortgage payments until you are back on your feet and ready to start working again.

Get rid of Unnecessary Debts

One of the best things to do is prioritise your debts. If you are struggling financially you may need to cut back on luxuries. That may include canceling your sky TV package, selling any second properties or even downsizing your house. The main priority is having somewhere to live and paying your utility bills. You may like your summer house and not want to give it up but desperate times call for desperate measures and you must work out what it is you need and pay for them first and foremost.

When you are ill you will have more important concerns than money. However if you are self employed and have a lot of financial commitments dealing with the money issues is unavoidable. Lenders and providers are sued to these situations and will be able to help but you must inform them of what it going on. If they do not know they cannot help you and you may find yourself with County Court Judgements or even facing repossession. Be open and honest about your problem and utilise all the help and advice on offer. Then you can concentrate on what is really important, getting better.

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