It may be too early in 2012 to start talking about repossessions but they are still happening and we have seen a very good article which we thought that we would share with you
debt advice now you know it makes sense.

Why was the Homeowners Mortgage Support Scheme which was created to help borrowers deal with financial hardship and a sudden loss of income was closed on 21 April 2011. According to an interim report by the Department for Communities and Local Government, in the year up to March 2010, only 32 borrowers were entered onto the scheme.

However the Mortgage Rescue Scheme was put in its place and allows families to get an equity loan to reduce their mortgage or sell their home and remain as tenants. Up to March 2010, the scheme had helped 629 people.

Many insolvency firms confirm that a number of clients benefit from these schemes, which allow individuals with arrears have been able to sell their property for 95% of the current market value and then rent the property at less than market rates. This has allowed families to free up income to cover reasonable living costs and make a contribution to their unsecured debt.

“The continued decline of house prices since March 2010 means that there is an ever-increasing stock of houses appearing on a stagnant housing market. Therefore, for individuals in debt and with arrears, selling their property quickly is far from certain.

For 2012 this is the year when its very important for people to hold onto their job, dealing with the mortgage arrears is first priority followed by dealing with unsecured debt. That’s exactly where Individual Voluntary Arrangements (IVAs) and debt management plans can help as they automatically prioritise payments to secured lenders, which includes provision for clearing arrears. It is then relatively simple to get unsecured loans on reduced payments until the individual can increase their income.

“The problem really arises when individuals lose their jobs and there is little or no income for the household. This is likely to become a real problem for many more people as we move through 2011.

“Effective budgeting is vital if you are struggling with your mortgage arrears. When you know what your surplus is, you can go back and add a provision for mortgage arrears in order to clear your arrears over a reasonable period of time – usually between two and four years, however, this can be extended to the remainder of the mortgage.

“However, if you are facing repossession and you are in a position to pay your normal mortgage payment but your lender is reluctant to agree a more reasonable repayment period, you should seek legal advice. There is very helpful information on the direct.gov website which includes how to get free legal representation.

“Finally, don’t forget your unsecured debts. There is no sense agreeing to a payment plan that leaves you without enough money to live on or without the minimum payment for any credit cards or loans. If neglected, these creditors will ultimately opt for judgements and charging orders which could compound the problems even further.”

Once again if you are in any doubt then please send us an e mail the link is on the right under “contact us” and we will be pleased to speak with to you.

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