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Debt Management Advice on Preventing Repossession |
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There were nearly seventeen thousand repossessions in the third quarter of 2011 according to up-to-date figures from the Ministry of Justice. This increase by a fifth in the figures, now reaching the highest level for three years, may enhance calls for people to seek early debt management advice on how to avoid this outcome. A common perception is that the majority of repossessions result from not paying a mortgage. In fact around 30% of repossessions emanate from social landlords, and a further 10% from private landlords. No matter who you rent from, it’s clear that a build-up of rent arrears will place you in the same potential peril as failing to pay a mortgage. Anyone working in the field of debt management advice acknowledges the sad fact that some amount repossessions are inevitable. However, the belief of those that provide debt management advice is often that repossession could have been avoided if only people had taken advice on their position sooner. The reason behind this belief is that those seeking debt management advice commonly have a mixture of unsecured debts (like credit cards or payday loans) which are costing them so much that their rent or mortgage payment has got behind. No matter how obvious it often seems with hindsight, a person on the end of an aggressive debt collection telephone call (or reader of a threatening debt collection letter) will often pay the unsecured credit and leave themselves short to pay their rent or mortgage. Debt management advice can vary from source to source, but any trained or experienced adviser will advise any client to prioritise payments for essentials like mortgage or rent payments, utility bills, and food. Prioritisation means not paying a penny to any unsecured creditor until these things have been paid for. It also means taking care of any arrears that exists with your mortgage or rent before paying a penny to any unsecured creditor. The worry for the person seeking debt management advice can be what they will do about their unsecured debts. The fact of the matter is that you cannot pay money that you do not have. Those who are trained in debt management advice can work with you to analyse your situation and point you towards options depending upon your circumstances and preferences. These may include a debt management plan, IVA, debt relief order, bankruptcy, or hopefully just a simple re-budgeting exercise. The key points are therefore to prioritise mortgage or rent payments, prioritise catching up on mortgage and rent arrears, and to take debt management advice as early as possible if your housing worries can be partly traced back to a build-up of other types of debt. If you’d like further debt management advice visit the forum at DebtManagementPlanForum.co.uk. A number of debt management advice firms are represented in the forum and will be able to answer any questions that you may wish to raise there. |
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