Priority Debt: Mortgage Arrears
If repossession is imminent, urgent advice should be given as an emergency via triaging if a debt adviser is not available, such as housing options or setting aside the warrant. This is a priority debt and if you do not pay the debt, it may result in the repossession of the property.
If repossession is imminent, urgent advice should be given as an emergency via triaging if a debt adviser is not available, such as housing options or setting aside the warrant. This is a priority debt and if you do not pay the debt, it may result in the repossession of the property.
It can be very stressful when is mortgage arrears because you may lose your home, and along with that, you may lose a property which is also an asset. In such a situation, you should seek advice from our debt adviserso we can explain your rights and options.
If you are is a leaseholder, they may also be referred to the Leasehold Advisory Service for advice. You can find more on the Leasehold Adviser Service.
It is important to understand the types of mortgages you have. Is it a tracker mortgage, interest-only repayment or shared ownership? Again, the adviser can guide you and provide a suitable option for the debt.
Key Stages in the Debt Recovery Process:
Initial Contact: Lenders must contact you to discuss repayment options, such as payment breaks, extending the term, or adding arrears to the loan.
Pre-Action Protocol: Before taking court action, lenders must follow specific FCA rules (MCOB) to ensure fair treatment, including allowing for debt counseling.
Default/Calling-up Notice: If arrears continue, a formal letter is sent, sometimes giving 2 months to repay the full loan, essentially ending the mortgage.
Court Action: Lenders can initiate legal proceedings through the County Court for a Possession Order.
Repossession & Sale: If the court order is not met, the property is repossessed and sold.
Shortfall Debt: If the sale proceeds do not cover the outstanding mortgage, fees, and interest, the remaining debt is a "shortfall." Lenders have 6 years to pursue this (12 years for the principal)
Get help
If you need advice about your situation, we can help for free.
- Email: info@youthlegal.org.uk
- Phone: 020 3195 1906 (Mon to Fri, 10am to 6pm)
- Contact form: youthlegal.org.uk/contact-us
All our advice is free and confidential.