Government announces plans to close legal loophole which enables lenders to repossess homes without going to court.
Following an eight week consultation period by the Ministry of Justice, the plan is to close a legal loophole which currently
allows a lender to sell an owner-occupied residential property without the approval of the owner or the courts.
Previously borrowers that had missed two monthly repayments were vulnerable to immediate repossession. This issue came to light as a result of a campaign by charities in the case of a judge ruling in favour of a lender who had repossessed a house in such circumstances.
Anyone concerned about losing their home can contact Directgov or the National Debtline on 0808 808 4000 for impartial advice.
The Legal Services Commission funds a telephone helpline and website called Community Legal Advice (0845 345 4345) from which people can get general information about their rights and find out where they can get advice.
Source justice.gov.uk
Debtwizard comment
Having your house repossessed is a most distressing event and whilst an unusual step for lenders to take, borrowers were always vulnerable to this loophole which enabled a lender to repossess after just two months of arrears.
The proposal to stop this happening in future is good news for any borrower that has hit hard times and it will now make the lender demonstrate to the court that they have exhausted all other avenues prior to repossession, the decision to repossess now to be taken by the courts.
It is also encouraging that borrowers can get access to impartial advice and guidance without any hidden agendas from the adviser.
My only concern is that for some borrowers, repossession may be the only way forward due to the level of their arrears and their inability to repay because of their financial circumstances, such as unemployment. In many cases this will only postpone the repossession for a later date.
Nevertheless it is a positive move for the majority and the government must be congratulated for taking this step.
If you are struggling to repay your debts, then think about getting some professional advice on how you can manage the payments.
SEEK ADVICE with a view to how to restructure your finances. This may include entering into a repayment programme that you can afford such as a debt management plan, Individual Voluntary Arrangement (IVA) or even bankruptcy.
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