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With up to 45,000 homes repossessed this year, many of us are concerned that our house could be next. It's a good idea to know what your rights are and what to do if you fall behind on repayments because if you take care, you can avoid joining these 45,000 families. Each repossession case occurs differently, but they all have the same stages of development. Ignoring the problem won't make it go away, but speaking to your lender actually might.
It seems obvious. You know you're not going to be able to afford the mortgage this month, so you should tell your lender about it, but thousands of people don't because they're worried. By letting your lender know that you're struggling financially, you'll prove to them that you're trustworthy and honest and they might even offer you a mortgage 'holiday' or offer to lower repayments and spread them over a slightly longer period. If you do ignore your lender, they could be forced to take you to court just to be able to talk to you about the problem. Instead, speak to them right away and tell them when you think you might be able to pay them. You should also tell your lender that you're going to get some extra advice and then do it.
Consider cutting back on certain expenses, if you can't cut back on anything then look into ways of increasing your income. For example, you could rent out a room. If you know these things can't help you, consider contacting a solicitor and seek advice from Shelter who have a lot of experience dealing with repossessions. When you speak to lenders and advisors, try to be as honest as possible. If you don't tell them the amount you can really afford, they can't offer you real advice. Lenders need to know how much you can pay them and when you can pay them, but they don't want you to overstretch yourself and not be able to afford basic, important items like food and electricity. A lender will always be happier if you communicate with them and tell them how hard you're trying to pay. Telling them you have spoken to advisors, show them that you do want to improve matters.
If you don't speak to your lender about your trouble repaying and can't make repayments when you get a final notice, they may take you to court. The document that begins the court action is called an Initial Writ and you'll receive this at your address. You then have to respond within 21 days and speak to a solicitor right away. It is the court's decision whether or not a home should be repossessed, not the lenders, so if you can prove at that stage that your lenders are responding in an unreasonable manner, you may still get to keep your home. However, if you speak to your lenders and seek help, it's much easier to show that you are doing your best to pay them. If you can't afford a solicitor, get free advice from CAB, Shelter or the Scottish Legal Aid Board, but definitely get it because without it you can't make a case.
