Advice on loan and mortgage repayment

stepin · 28 November 2012 at 2:19PM

Hi,
I have been advised by my bank (natwest) to seek independent financial advice.
14 months ago work dried up and I fell into arrears with mortgage and loan repayments an OD charges. I negotiated a repayment plan for the mortgage for 6 months which has just come up for review. During this time I made no repayments for the loan or OD.
The new payments that the bank have proposed are £300 a month more than I can afford (this includes loan and OD repayments).
I can afford the full amount they want towards the mortgage, but only a token payment for the rest....... Hence seeking advice on the best way to proceed.
One concern is they said they could put all the debt against the property.... I was under the assumption that this is not possible.
Also if I sold the property, I still have some equity in it, are they able to claim that money somehow to go towards the loan repayment?
Advice I have received so far is make the mortgage repayments and negotiate a token repayment towards the rest.
Please advise, many thanks

Wywth · 29 November 2012 at 10:36AM

stepin wrote: »

Hi,
I have been advised by my bank (natwest) to seek independent financial advice.
14 months ago work dried up and I fell into arrears with mortgage and loan repayments an OD charges. I negotiated a repayment plan for the mortgage for 6 months which has just come up for review. During this time I made no repayments for the loan or OD.
The new payments that the bank have proposed are £300 a month more than I can afford (this includes loan and OD repayments).
I can afford the full amount they want towards the mortgage, but only a token payment for the rest....... Hence seeking advice on the best way to proceed.
One concern is they said they could put all the debt against the property.... I was under the assumption that this is not possible.
Also if I sold the property, I still have some equity in it, are they able to claim that money somehow to go towards the loan repayment?
Advice I have received so far is make the mortgage repayments and negotiate a token repayment towards the rest.
Please advise, many thanks

I suggest you make an appointment with your local CAB office.

Take along all the relevant paperwork, especially the terms of the repayment plan you previously negotiated, and details of how the £300 per month has now been proposed.

The CAB will need to see what was actually agreed in order to advise you further

Often, in cases like this, lenders just defer repayments and interest, adding it to the capital to be repaid, but you may have a different agreement.

Who has given you the financial advice so far in this matter?

stepin · 29 November 2012 at 4:53PM

Hi
Thanks for the response. My plan is to go to the CAB. I was seeing what responses I would get..... Maybe someone with similar experience. I haven't had any professional advice as such, just what I've gleaned from a little research and from what friends have said.
I've only discussed this on the phone with the bank, so don't have anything in writing regarding the new plan.
A couple of people have suggested that the bank will be 'happy'

if the mortgage is covered and a token gesture of payment toward the loan. As this is not secured..... Although I'm now lead to believe they can lump it in with the mortgage and make it secured against the property. I'm guessing this will need to be negotiated with the bank.
Cheers

CAB_Swansea_Bay_representative · 29 November 2012 at 7:55PM

Hi Stepin, thank you for your query regarding loan and mortgage repayment.
You are doing exactly the right thing by prioritising your mortgage and making an offer of whatever you can afford for your loan and overdraft and you should ask Natwest to separate your secured and unsecured lending as they cannot start repossession action against you for failing to make the contractual payments on an unsecured loan or overdraft (unless they are secured loan or overdraft). Regarding whether they can put a charge on your home for your overdraft or unsecured loan the answer is they can but in order to do that they must first get a CCJ against you and then apply for a Charging Order (although the court has some discretion in this) to secure the debt against your property and unfortunately the law changed in Oct this year which made it easier for creditors to obtain a Charging Order so if your creditor will not accept your offer and is threatening county court action I would suggest you seek specialist advice from a debt adviser. You can find your local Citizens Advice Bureau at https://www.citizensadvice.org.uk and can find more information about enforcing a county court judgement at https://www.adviceguide.org.uk.
Hope this is of assistance

stepin · 29 November 2012 at 11:44PM

Hi,
Many thanks for your reply, Its reassuring to know I'm on the right track. Thanks for the clarification regarding the loan situation too. I plan to get in touch with bank and make my proposal and take it from there.
Cheers

Advice on loan and mortgage repayment

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