Worried I'll lose my home

Laurz29

I have finally decided I need to sort my debts out, my partner left me last year and I've been living on credit ever since. I now owe over £15k and have no money to pay it off. I've spoken to step change debt advice and they have advised me on bankruptcy or a debt management plan. I'd rather not go bankrupt. My main worry is my mortgage, the fixed rate is due to end next year and I'm panicking about losing my house if they credit check me to see what options are available. Will I automatically transfer to another rate or will I have to apply again?, it really confuses me! I want to get my life sorted but I'd be gutted to lose my home. Any advice would be greatly appreciated x

RAS

if you cannot get a new deal, your mortgage reverts to teh standard variable rate with your existing supplier.
Do you have room in which you could take a lodger? Rent a room is tax free up to £370 per month.

Laurz29

So no matter what I'll keep my home I'll just have to pay the rate that it transfers too? Sorry I really don't understand it very well. My credit accounts are all defaulting so I know I won't be able to remortgage with a new lender. Thanks for you're reply

RAS

Laurz29 wrote: »

I'll just have to pay the rate that it transfers too?

Yes you will just have to pay the SVR.

Do talk to step-change or ask the staffers who post on here to help you understand.

Laurz29

Thank you RAS.

AFK_Matrix

RAS wrote: »

if you cannot get a new deal, your mortgage reverts to teh standard variable rate with your existing supplier.
Do you have room in which you could take a lodger? Rent a room is tax free up to £370 per month.

Just to clairfy that its not £370 a month but £354 a month as the yearly tax limit is £4250, unless this has gone up as its not saying this on the government site.

cc4rhu

I think you can stop worrying about losing your home as long as you keep paying your mortgage and other secured debts your fine. Unsecured debts, credit cards etc. will give you defaults, possibly CCJs if they go that far. When your mortgage deal expires you automatically go to the variable rate which is fortunately very low at present and coud be that way for a while the way things are going. You'll only need to apply for a new mortgage if you wish to switch to a better deal in future.

leicestersq

Is there a potential problem if Laurz29 has some equity in their home?

I thought that a creditor, if unsecured, has the ability to go to court to acquire assets from the debtor if they have assets? Isnt that something to be sure of there before saying that everything is ok?

blossom36

leicestersq wrote: »

Is there a potential problem if Laurz29 has some equity in their home?

I thought that a creditor, if unsecured, has the ability to go to court to acquire assets from the debtor if they have assets? Isnt that something to be sure of there before saying that everything is ok?

I have 45% equity in my home and have been paying a dmp for nearly 3 years with many more to go. I have never been threatened by any of my creditors to force the sale of my house. I understand its an avenue they could use but that its uncommon for them to do so if you commit properly to the dmp and dont mess your creditors around.

Laurz29 your mortgage rate will revert to the standard rate which hopefully wont be more than you are paying now.

leicestersq

I found a link that might be relevant, but I am unable to post it due to my being a new member. The article is in the independent website, called "£1000 debt could force you to sell your home"

I dont know how this would apply in your case, but I am pretty sure that if you have net assets, then a creditor may seek to acquire them to repay any debt. So please check the advice of those who say that it doesnt matter.

c85

leicestersq wrote: »

I found a link that might be relevant, but I am unable to post it due to my being a new member. The article is in the independent website, called "£1000 debt could force you to sell your home"

Lets get this straight... If for example your unsecured creditor got wind of the equity in your property they may seek court action to gain a CCJ. Once gained they will either a) accept your monthly payment still or b) ask for a judgment forthwith knowing you cannot pay in full thus causing you to default on the CCJ. They would then be able to go for what is called a Charging Order. This basically turns the unsecured debt into a secured debt on your property. Once gained they then technically can ask the courts for an Order of Sale to force you to sell your property so they can claim their money from the sale. THIS ACTION IS EXTREMLY RARE.. it involves a court hearing and a judge to make that decision is very unlikely indeed especially if your are making reasonable efforts to pay back the debt. In your case if you have a large amount of debt and can only pay very small amounts under a dmp then the charging order action is likely but most creditors would be happy to sit on the security for many years to see if your situation improves and you an offer reasonable payment. They already have the security that in the event your house is sold (either voluntary, on death or forced sale) they WILL get their money!

Hope this helps unlike the guy aboves uninformative nonsense.