How Can You Avoid Repossessions?
Draw Up A Debt Plan
You'll need to work out what regular payment you can afford to make to your lender (to cover both the arrears and on-going mortgage costs). There are several free debt advice agencies (Consumer Credit Counselling Service National Debtline Citizens Advice) that can help you prepare a debt repayment plan (outlining all your income, expenditure and any spare money), work out what you can afford to pay your creditors and negotiate on your behalf.
Contact Your Mortgage Lender
Once you've drawn up a debt plan, write to your mortgage lender as soon as possible to negotiate an affordable repayment arrangement. You'll need to include a copy of your financial statement showing how you have arrived at the amount you are offering. Lenders have different policies towards customers who fall into arrears; some are more understanding than others. Be proactive and accommodating.
If the lender refuses your offer, the fact you've made one is a sign that you want to be helpful. If you are not happy with the way your lender deals with your case, you can complain, firstly via the lender's own complaints procedure then to the Financial Ombudsman Service
Generate More Income
Explore ways you can increase your income to help you deal with your debts. do overtime; or get a weekend job. (Government help towards mortgage payments is available for some homeowners depending on circumstances but it only kicks in after nine months of unemployment).
Court Action As A Last Resort
If you haven't been able to come to an agreement with your mortgage lender, the court will probably allow them to press on with a repossession order. The lender will usually sell your property at auction as quickly as possible. If the sale price doesn't cover the mortgage, you will still be liable for the remainder. So it's often better to sell the property yourself. You're likely to get a better price than letting the lender repossess it and sell it in haste.
Dos and Don'ts of a House Repossession
Never just hand back the keys to your mortgage lender and walk away unless you've sold the property or there is a court order to evict you. You will still be responsible for mortgage payments and buildings insurance, etc, until the property is sold.
Seek immediate specialist advice, if you are in arrears on a second mortgage or secured loan on your home, the lender will usually push for its sale.
Never pay for debt advice. Sometimes it's hard to tell the free, independent debt advice services from the privately run, profit-making debt advice companies advertising in the phone book or on the high street. Call one of the helplines above.
