At one stage, the Council of Mortgage Lenders anticipated that there would be 75,000 repossessions in the UK during 2009. Then the forecast was reined in by 10,000 repossessions by June of this year, to 65,000. Of course, while still no fairytale, this was taken as a very positive sign for those facing spiralling debt in the UK. Perhaps this was due to increased restraint on the part of borrowers, more responsible lending or the government’s economic measures, like maintaining the low rate of interest. However, the estimated number of repossessions has been revised once again and the latest release has set the figure some 35% lower than was originally thought, at 48,000. The message here is that, despite the perpetually bleak picture of the economic climate, the number of mortgages in arrears has fallen and with it, the number of people facing repossession in Britain.
We have also seen the recent expansion of the Income Support for Mortgage Interest scheme. This is a government initiative that simply means that homeowners have less waiting time between losing their jobs and receiving financial aid in servicing the interest on their mortgage payments. The wait has been cut from 39 weeks to 13 weeks and there is no doubt that it is a valuable asset to homeowners facing debt problems. As is the Homeowner Mortgage Support Scheme, which allows households that suffer an unexpected drop in income to defer a portion of their mortgage payment for a period of up to two years.
The earlier that you confront your debt problems and approach your creditors, whether this is your mortgage lender or other creditor, the greater your chances are of saving your home. You have to remember that the primary objective of your lender is to collect your repayments and this is not possible if you’re bankrupt. As a homeowner, you should also be striving to avoid bankruptcy as it is highly likely you will lose your home. One of the primary attractions of an Individual Voluntary Arrangement over a declaration of bankruptcy is the inherent risk of losing your home. An IVA will allow you to keep your house but it may require you to relinquish some portion of the equity that you have in it, in order to service your debt.
No matter what, you must contact your mortgage lender immediately should circumstances arise in which you will struggle to uphold your repayment schedule. There is a strong chance that you will receive a more lenient approach from your lender. Seek out professional financial assistance and debt advice too. All financial circumstances are different and there is no quick fix to you debt problems. Don’t hesitate in getting debt help. Take the 15 second debt wizard at Harrington Brooks for a personalised advice about our debt solutions.