It is essential for anyone facing repossession to consult with their lender as soon as they consider themselves to be experiencing a problem with paying for their mortgage. Lenders are obliged to aid their customers in finding an appropriate solution to their repayment problems and the solution does not necessarily have to involve selling the property associated with the mortgage.
The Pre-Action Protocol
Lenders have an obligation to fulfil a range of conditions to provide an individual with the chance to retain their home. This set of conditions is known as the pre-action protocol. In the event that a repossession case is taken to the courts, both parties must prove that they have followed this protocol.
A lender must inform an individual of the amount that they owe and any interest that they will have to pay and must consider a request to change the way in which an individual pays their mortgage and should respond to all offers of payment made. A lender is required to provide an individual with reasons for turning down any offers of payment within a maximum of ten working days and should provide 15 working days’ written notice if court action is to commence with regards to a failure to abide by a repayment agreement.
Managing Repayments
To aid an individual in managing repayments, a lender may agree to lengthen the mortgage term, accept reduced payments in the short term and/or add repayment debt to the sum of money borrowed.
The debtor will need to show that they are willing to meet the cost of repayments that they can afford. They must pay what they can, when they can, even if they are unable to afford to meet the cost of the full payments. A debtor should obtain written copies of any repayment arrangements that they make with their lender and retain contact with their lender so that the lender is informed with regards to any changes in their circumstances.
Seeking Advice
A debtor should consult with an advisor immediately in the event that they are unable to agree to a suitable repayment agreement with their lender or are unable to pay at all. A trained financial adviser from an independent organization that provides free and impartial advice should be able to provide tips with regards to talking to lenders, prioritizing debt repayments, decreasing spending and any government-backed schemes or benefits that an individual may be entitled to.
With the support of their lender and following receiving financial advice from an expert, individuals facing repossession will not necessarily have to hand over the keys to their house to solve their debt problems.
This article has been provided by The Debt Advisory Line, the UK’s number one debt management provider in 2011, 2009 and 2008 awarded at the National Credit Today Insolvency & Rescue Awards.