As a result of the current economic crisis, two words are becoming more commonly used – Recession and Repossession.
This year, it is estimated that over 40,000 homes will be repossessed in the UK. Each repossession case is different, but anyone who falls into arrears with their lender should bear in mind the following advice:-
- Most importantly, do not ignore the problem. If you fall into arrears, your lender will write to you to ask you to settle the arrears before taking the matter any further. If you can make savings (ie by cutting back on spending or increasing your income in some way), then you should pay the arrears back as soon as possible. If you cannot make savings, then you should talk to your lender as soon as possible to see if you can both come to some sort of an agreement with regard to paying back the arrears. New rules mean that, since 22nd October, lenders are under a duty to explore every possible avenue before going to Court.
- If you do ignore the problem or if you cannot negotiate with your lender, then your lender may apply for a possession order from your local County Court. If this happens, you will receive notice, from the Court, of a hearing date. Do not ignore this notice and ensure that you attend every hearing set by the Court. If you do not attend any hearings, the Court may deal with the case in your absence and this could lead to your house being repossessed without you having had the opportunity of having your say. At any hearings, you should tell the Judge exactly what your financial situation is (it would assist the Court if you could provide documentary evidence of this) and what your proposals for payment of the arrears are. It is the Judge and not your lender who decides whether or not to grant a repossession order and the more information you can provide him or her and the more honest you can be in relation to your financial situation the better.
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