Secured loan help and info

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gazmon
gazmon Posts: 37 Forumite
in Debt-free wannabe
Hi all,

Just a few question regarding secured loans and the legal aspects

For info i have 2 secured loans in joint names with my wife, i have been struggling financially lately and have fallen a little in to arrears with the payments although i am trying make then payments up

the 2 loans total about £25000, please correct me if i am wrong but i understand that if i default and dont pay these loans then they can make me sell my house correct and thats even if my mortgage is totally up to date and good?

could i agree a lower payment with the loan company if i am struggling to meet the payments in full every month?

any help and advice on secured loans would be very appreciated

gazmon

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  • sourcrates
    sourcrates Posts: 28,878 Ambassador
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    edited 15 May 2017 at 2:35PM
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    Yes, if you default on a secured loan, they can take you to court, and start repossession proceedings against you, and if you still can't pay, then an order for sale can be granted in favor of the creditor.

    Orders for sale are quite rare though, usually your lender will work with you to clear the arrears, I would advise you talk to them and try to come to an amicable agreement that you can stick too.

    Secured loans are priority debts that should be paid before any unsecured debts you may have.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
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    Hi Gazmon

    As the loan is secured it wouldn’t actually be necessary for the loan company to apply for a CCJ. They could take court action in order to repossess the property, in the same way a mortgage lender could.

    It is true of course to say that secured loan arrears are a priority debt and must be prioritised over paying any non priority debts like credit card, overdrafts and unsecured loans.

    You will need to complete a SOA to work out an offer of payment, you can do that here http://www.stoozing.com/calculator/soa.php.. Ideally you should be offering the contractual amount plus something extra towards the arrears. The lender may consider temporarily changing the loan to interest only to reduce the monthly payments. There may also be the option of a time order, where the court can change the contractual amount of the loan, but this is a more complicated area and you will need advice from one of the free debt advice agencies.

    Susie
    @Natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,594 Ambassador
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    If the loans are secured on your property yes they can apply for a possession order. You should not let it get to that stage and contact the lenders beforehand to see if lower payments can be arranged. What were the loans for and is there anything you can sell to help out in the meantime?
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • gazmon
    gazmon Posts: 37 Forumite
    edited 15 May 2017 at 8:59PM
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    Thanks for your replys

    The loans were for home improvement, consolidation, and vehicle upgrade

    They are with together (formerly Blemain) the loans are just a month behind , I had agreed to over pay both of them to clear the arrears as well as pay my contractual payment but I'm struggling a bit with the high payments

    I am earning I just need a lower monthly payment tbh, I have sold items to raise cash but long term that's not the answer as you all might
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