Home repossessions in the UK are at a 12 year high. The recently privatised Northern Rock Bank is repossessing 50% more homes than the mortgage industry average. Ouch!
Debt trap - to sell your home or let it be Repossessed?
In order to avoid repossession you need to talk to your mortgage lender as soon as you realise that you cannot afford your mortgage payments. The reason most people find themselves in these life changing circumstances is often due to the high level of credit card debts, loan debts and mortgages.
What ever you do don’t be tempted to abandon your home. Your mortgage lender will add any interest and all the costs they incur for the disposal of your home to your total debt until your home is sold. That’s Interest on your mortgage until your mortgage account is settled, Estate agent fees, solicitor’s costs for selling, the banks costs for all their letters and staff time spent and their legal fees, etc. This means that you will end up owing thousands of pounds to your mortgage lender after they have disposed of your home. Your mortgage lender can and will pursue you for any money due to them from the sale of your home for up to 12 years.
Try and sell your home first or seek an alternative solution as this will help you limit your costs that you will owe. The best solution here is to contact a Debt Management organisation like, Consumer Credit Counselling Services (CCCS) or National Debtline both are run by charities and they offer a free advisory service. Alternatively you could try and do it yourself, start by paying your mortgage and any secured Homeowner loan payments first each month. This will keep a roof over your head while you try and sell your home for the best possible price you can get. What ever money you have left at the end of each month after paying your mortgage, utility bills and living expenses should be divide proportionately between the loan and credit card providers that you owe money to.
What ever you do you must make a payment to your loan and credit card providers each month until you have sold your home. If you do not then your creditors can take you to court. If your loan or credit card provider try to take you to court for not paying your agreed payments to them. You will then need to prove that you have made an effort to pay them every month. The courts are more likely to deal more leniently with you if you have made an effort to pay – pay something even if it is your last £1 pay it.
The reason for this blog post is that most people don’t actually realise that they are still in debt for a further 12 years after their home is repossessed by the mortgage lender. The Mortgage lender can still pursue you for payment of the outstanding debt from the repossession. Therefore it is worth fighting to hold on to your home at all costs. Take my advice and seek professional help from a charity run Debt Management organisation.
Your thoughts, experiences and comments are very welcome. To Leave a Comment just CLICK on the green coloured COMMENT BAR below and leave your thoughts, experiences and comments today!
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Its scary how many more people this is affecting as we head deeper into the recession. I hope I’m never in that situation but you never know. Had no idea about the point you made that if you let your home get reposessed the debt remains – I would have thought forefeiting your home would be enough for them!
The Information here is great and has helped me get rid of paying it off. since I’m currently studying about debt management plan, UK debt management, IVA advice, and others related to debt problems.
How financially fit are you I hope you will get exact answer when you will face with sudden problems and then how you will over comes from there. Is the matter to know about your financial positions.
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Yes i agree with what you said that yo have to make sure if that you can afford your payments so that you will know how you can pay for it or you will find solutions if time will come that it will need to repossess your home. It is also important that you know your responsibilities in life and learn how to overcome with it.
If things are really get more tougher and you cant afford to pay for your debt, there are a lot of agencies who offer the best solution for your offers and will surely help to solve it as it was stated above that a mortgage lender will help you pay the debt that you cannot afford to pay but of course with assurance that you can also pay for them.
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