Money worries are common for a lot of us, and the number of people experiencing money troubles and getting into debt has been increasing in recent years. This is understandably something that causes a lot of stress, especially for homeowners. The word repossession strikes fear for many homeowners, and finding ways to manage debt is the first step to avoiding this.
Managing debt involves ensuring that your payments do not fall into arrears and that your account does not move to debt recovery. We have outlined the steps below and ideas for each stage.
If you find that you are struggling to meet payments on any of your credit accounts, you should contact the company that provides your credit account immediately. This would preferably be before you miss any payments. You should discuss your full financial situation with the lender and establish if there is anything that they can do to help you.
This could involve a payment holiday for a short-term financial issue or an adjusted repayment plan for a long-term financial change.
If you are unable to reach an agreement with the lender, your account will move to debt recovery. This may involve a debt collection service taking over the debt from the original lender. If this happens, you can discuss the debt with the collection service to reach a payment arrangement. A debt collection service may be more open to a payment plan in some circumstances than the original lender.
If you are unable to come to an arrangement with the debt recovery company and the debt relates to a property, the process may move to repossession. Repossession involves the lender beginning court proceedings if your account remains in arrears. The court will schedule a hearing to discuss the situation. When you attend, you can give the court the information you feel is relevant.
If the court accepts the information you provide, then they will stop repossession proceedings and issue a suspension order. This will allow you to make payments to clear the payment arrears on your property. The suspension order allows for debt recovery agents to repossess items within the property if you do not pay the payments agreed in this order.
If you maintain the payment plan and bring your account up to date, then you will continue to make your agreed payments, and the repossession process will end.
However, if you do not attend the court date, the lender will likely be handed a repossession order outright. If you know you are not going to be able to make any repayments on the account or will not be attending the court date, you may wish to make alternative arrangements.
This could be selling your home before the court mandates repossession. You can use a quick purchase company to sell your home. Richard Mews has over 30 years of experience in the housing market and is able to give advice regarding selling your home.
It would be best if you always kept in mind that your lender would rather have some money, and they do their business on the interest you pay. Being able to sell your home before court costs are added is a way the lender can receive more money and so may be more agreeable with them than the repossession process.