Avoiding Repossession

The prospect of repossession is a fear that many home owners face at some point in their life when they are in the property market. Especially in the current economic climate, the threat of repossession looms over many households. Property Mail doesn't like to see any houses get repossessed so we have crafted this handy guide to help you spot the dangers and pitfalls that can lead to a property getting repossessed.

Use Credit Cards Sparingly

While running up a certain amount of debt on a credit card doesn't put your house in any immediate danger, this changes if you end up with so much debt that you are approaching the need to declare bankruptcy.

This is because Government tax, such as that garnered on unsecured debts like those amassed through use of a credit card, can be legally paid off via a repossession, leaving your home potentially at risk if you find yourself in this situation. It is by far the least common occurence of repossession, but it can and has happened.

Don't Run Up Arrears on A Mortgage or Secured Loan

Mortgage lenders do not want to repossess homes. It is an expensive and lengthy process that can take up to six months. This is why you are often able to negotiate more suitable terms if you find yourself in a situation where you may potentially run up arrears. Don't be afraid to talk to a mortgage advisor because the problem won't disappear if you ignore it.

Obviously the best way to avoid this situation is to not run up arrears in the first place. However if you do attempt to control the problem as much as possible and keep in regular contact with your mortgage advisor. Remember, it takes around 6 months for the repossession process to advance from the stage of falling into arrears to actually having your home repossessed. This gives you plenty of time to negotiate new terms with your provider.

Re-Negotiate Before You Enter Court

If the repossession process is started against you, you will be sent letters from your mortagage lender to inform you that the process has been undertaken. This is often your last chance to re-negotiate terms with the lender and ensure you don't lost your house. If you fail to respond to these letters, you will eventually be summoned to court.

Once the case reaches court, the judge has the power to immediately repossess your home if the situation is deemed to merit it. However it is much more likely that the judge will attempt to work out an agreement between both sides. This may leave you in a worse position than if you had independently negotiated though, as this is the last chance you have to retain your home. It is best if you don't let the process reach this stage as it may lead to the terms of negotiation being completely removed from your hands.

Keep these tips in mind and you are sure to stand a higher chance of avoiding repossession.