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mortgage arrears and repossession

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  • mortgage arrears and repossession

    I have 3 and a half years left on my mortgage of 25 years, I've fallen into 9k arrears over the last 2 years and now my mortgage provider is taking me to court. We feel we must sell our home now but a friend has told me that whatever profit we make, the court will make us settle all our debts like our car finance. The thing is, we also took out finance for our daughters car and she pays us. Will we have to pay our and her finance off ?
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  • #2
    Re: mortgage arrears and repossession

    Can you increase payments to pay back the arrears by the end date of the mortgage. if so you can ask for the posession order to be suspended and then come out of the event debt free. Alternatively can you remortgage so cover the remaining amount and the 9k?

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    • #3
      Re: mortgage arrears and repossession

      I can't imagine why your friend told you that.

      As far as I'm aware the only people you have to pay when a property is sold are those who have a registered charge on it (unless one of you in bankrupt but I would expect the OR to have registered their interest).

      What stage have these possession proceedings reached?

      You say you have three years left on your mortgage. There's case law which may assist you which says that as long as you can clear the arrears before the end of the mortgage term then you cannot be repossessed (only a Suspended Possession Order).

      It's Cheltenham & Gloucester Building Society v Christina Norgan here > http://www.bailii.org/ew/cases/EWCA/Civ/1995/11.html

      However £9k is a lot to pay off over 3.5 years (you'd have to pay the contractual monthly payment too) and the court would expect to see 'hope' in the way of sufficient income etc.

      If you've managed your mortgage for nearly 20 years what has happened in the last two years to cause these arrears to accrue in case it's something temporary which can be addressed?

      Is there equity in the property and any reason why the lender wouldn't capitalise your arrears (add them to the capital borrowed so you have no arrears)? This would mean you'd pay interest on the amount they've capitalised but if that's affordable it could save the roof over your head.

      Is this a repayment or interest only mortgage?

      I don't know how big your property is, but if push comes to shove have you considered taking in a lodger which you can do free of tax under the Government's Rent-a-Room scheme? That could help your cash-flow issues.

      Di

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