As the UK continues deeper into recession, many people are finding it increasingly difficult to manage their finances, particularly those individuals with a homeowner loan or other personal loans and debts, many of whom are struggling to keep up with their monthly loan repayments as money gets tighter.

As more and more borrowers are falling into arrears on their loans, the Council of Mortgage Lenders (CML) has joined with charities Citizens Advice and Shelter to offer some joint advice and a few simple steps to help borrowers in staying in the good books with their various creditors.

Firstly, someone with financial difficulties should not ignore the problem, as this will only make matters worse. Don’t panic and give your house keys back to the lender, as this will make no difference to your circumstances and always try to maintain some level of repayments, even if it is not the full amount.

The lender will view this on a more positive basis and helps borrowers retain their eligibility for some government assistance. Homeowners should be very wary of entering into a sale and rent back scheme in order to clear their loans, as these are not regulated and offer no guarantees of remaining in your home.

Those borrowers who are already in difficulty should contact their lender(s) as soon as possible. The company will do what they can to try and help find a solution to the problem.

This could include: restructuring the loan, extending the term, or switching to interest only, all of which can reduce the monthly repayments. There are a large number of debt organisations who offer free, independent advice on loan debts and what help is available.

Many people take out loan protection policies and then forget that they can claim on them (no, really it’s true!), such a policy could cover any loan repayments and stop the borrower falling into arrears in the first place. Finally, if things get really bad and you end up in court for repossession, make sure you attend the hearing as this will give you a much better chance of remaining in your home.

In order to stop getting into trouble in the first instance, whilst interest rates are so low, overpay on your homeowner loan, or switch to a repayment option if you are currently paying an interest only loan, to get in front with the repayments.

Repay those loans and debts which charge high interest rates first and then focus on other payments. If you can not meet all your loan repayments each month, prioritise them, so that those loans secured on your home are paid first, unsecured loans and credit cards can usually wait, as you will not lose your home over these, although you may lower your credit rating.

Over the course of the past year, people have seen the value of their homes decreasing and in turn this has had the effect of putting many potential buyers off making a purchase, choosing to wait until they feel that prices have reached their lowest level, thereby getting a bargain on the price and only requiring a relatively small homeowner loan, making the overall cost and affordability of moving house much more bearable.

The latest survey into activity in the housing market from the Royal Institute of Chartered Surveyors (RICS) has now revealed that interest is starting to return to the market and that the market has now bottomed out.

Although prices are now looking very attractive for buyers, the biggest problem still remains that of obtaining suitable funding through a mortgage or homeowner loan.

For those potential buyers who are moving and have a large amount of equity tied up in their existing property, getting a loan is not too difficult as they will only require a low loan to value, but first time buyers are still struggling to get onto the housing ladder as many of these individuals have not been able to save up enough money for the substantial deposits which are now being required by lenders.

The survey from RICS has shown that many potential buyers now believe that house prices have now reached the bottom, coupled with the fact that interest rates on homeowner loans are at a record low level, is the reason why they have seen an increased level of interest from people looking to move.

However the survey also shows that almost three quarters of the activity is coming from movers with large deposits available, rather than first time buyers, many of whom are still unable to get the loan amount they require.

Since the beginning of the credit crunch over a year ago, the majority of people living in the UK have felt at least some impact of the economic slow down in their personal financial circumstances and whilst some lucky individuals have noticed very little difference in their lifestyle, many other people, particularly those with outstanding homeowner loans, personal loans and other debts, have experienced a huge turn around in their finances, in most cases not for the better.

Many potential borrowers have not been able to obtain the loan amount which they require, whilst others have seen their income drastically reduced through either unemployment or reduction in working hours and pay.

But now, as the current recession continues to deepen, a new survey from Virgin Money has revealed that around 29 per cent of adults are anticipating that their income will reduce over the course of the next three months and certainly over the year ahead.

The report has also highlighted a distinct lack of confidence from borrowers in their ability to be able to keep up with their regular personal loan and mortgage repayments, with ten per cent of people expecting to not be able to maintain their monthly financial commitments.

Despite these negative results, Rob Clifford of Virgin Money was optimistic about the survey results, he said “We cannot trivialise the effects of the economic down turn. With 29 per cent of workers expecting a drop in disposable income over the next three months and next year, it is clear that there is a mood of caution throughout the country.

There is light at the end of the tunnel, however. Not everyone is suffering the same and not all businesses are equal in the recession. Some still have money to spend but they are increasingly careful about how they spend it. There are signs of recession everywhere, but there are also signs for optimism.”

With an ever increasing number of individuals in the UK facing financial difficulties over their mortgage, personal loan and credit card repayments, along with growing worries about job security and redundancy due to the effects of the credit crunch and economic slow down, more and more people are looking for good quality, independent advice on how best to manage their finances each month and what to do in the event of a build up of arrears on their loan commitments and as a result of this, are turning to organisations such as the Citizens Advice Bureau.

The Citizens Advice Bureau (CAB) is a charity which offers free impartial advice on a wide range of issues, but over the course of the past twelve months, it has been inundated with enquiries relating to debt worries, as many borrowers struggle to maintain their personal loan repayments and fall into the dreaded arrears situation.

Over the course of the last year, the CAB has helped over 5.54 million people to sort out their debt problems and with the current economic climate as it is, this number is expected to increase dramatically over the coming year.

As a result of this, the Government has provided an additional £10 million worth of funding for the organisation, in order for the CAB to extend its current opening hours, enabling their advisers to be able to see more people, at more flexible and convenient times.

It is estimated that this extension will allow the organisation to see an additional 600,000 individuals between now and March 2010. On an average day, the CAB receives 450 enquiries from borrowers who are facing difficulty with arrears on their homeowner loan or mortgage and 475 enquiries with regard to redundancy and the extended opening hours can only be of benefit to those individuals who desperately need the assistance and advice the charity offers.

It appears that there is one group of professionals who may be benefiting from the current economic slow down and actually seeing an increase in business and new clients…. that is divorce lawyers.

Recent surveys have shown that an increasing number of couples are struggling with their financial situations and finding it harder to keep up with the repayments on their personal loans, credit cards and other debts, which is having an impact on their relationship, causing more couples to argue on a regular basis and even to split up.

One such survey from Paypal has revealed that somewhere in the region of 32 per cent of partners have argued more over the past year, usually over a lack of money and inability to maintain loan repayments.

The survey also revealed that many households have experienced a dramatic turnaround in their financial situation, with around 61 per cent of those interviewed claiming they have had a change to the main breadwinner in the household due to either unemployment, or job changes.

On a more positive note, it appears that the situation has meant that many individuals are now more prepared to talk openly about their personal loans and other debts with their partners, rather than trying to keep it to themselves.

The Cheshire building society has also urged people not to let their financial problems get in the way of their relationship and is encouraging couples to work their problems out together, taking expert financial advice where necessary, as their individual financial circumstances are likely to become far worse for everyone involved, if they split up and attempt to manage their finances separately.

This is particularly the case where the couple own their own home. It is unlikely that only one partner would be able to keep up with the homeowner loan repayment on their own, whilst maintaining their standard of living and as we all know, it is not a good time to be trying to sell a property at the moment.