House of Cards
If you find yourself threatened with having your home repossessed, the sooner you act, the better.
That unwelcome brown envelope from your lender lands with a thud on your doormat. You have been dreading this moment for weeks. What do you do now?

The most important thing to do is to stay calm. Plenty of help is available from voluntary and government agencies. There is a well-trodden path for people in your situation, with a clear set of legal procedures in place, designed to give you every chance to triumph over your financial difficulties.

First, talk to your local Citizen?s Advice Centre. These are often short-staffed, and always very busy, so make your time there count. Have all the facts of your case ready at your fingertips; letters neatly in a file so that they can give you the most relevant advice.

As a matter of course, you should keep copies of all your correspondence with your lender. Also, make sure that the important letters you send are sent by ?Recorded Signed For? mail. If you contact your lender by telephone, keep a careful note of the date and what was said in the conversation.

Consider talking to a solicitor but bear in mind that, although your first meeting will usually be free, after that, you could be charged between ?120 and ?180 an hour. Therefore, if you do go to a solicitor, try to be specific with your questions. Once again, have all the facts at your fingertips.

Take a realistic and cold look at your finances. If you find that difficult to do, get someone you trust to do it for you. Ask yourself: why have you got behind in your payments? Is it just a one-off situation, or do you have an underlying problem with making ends meet? What can you do to cut you household costs?

A debt management company may offer to sort out your debts, but bear in mind they will charge for their services. A financial advisor too, might suggest that you remortgage or consolidate your loans, but beware ? taking out more loans to cover your outgoings is rarely the answer. It may help in the short term, but in the long run it could leave you in greater difficulties.

Commercial debt advice can be expensive, and the fees charged may not be immediately obvious. Plenty of free help is available elsewhere, for instance through charities such as the National Debtline, which has an excellent website with many resources.

The Consumer Credit Counselling Service offers debt counselling. It has set up a specialist unit to concentrate its own counselling expertise on repossession cases. Called the Centre for Repossession Counselling, it works closely with lenders to try to reduce or alleviate repossessions.

People who contact the CCCS are directed towards this specialist centre once it becomes apparent that mortgages and arrears need to be discussed.

The CCCS says that it has avoided repossession in three-quarters of the cases dealt with since the Centre opened in January 2008. ?That is mainly because we are getting people to talk to each other,? says CCCS spokesperson James Ketchell. ?Very many people ignore the letters from their lenders.?

Talking to your lender is vital at every stage. But how your lender responds to your overtures for settlement depends on the type of lender you have.

Generally, a High Street lender such as Halifax or Nationwide will give you every opportunity to come up with something that is workable, rather than take you to court.

But the subprime lenders tend to be less flexible. They get very nervous with any arrears, as they know they are into a risky product in the first place. They tend to start court proceedings a lot sooner than the High Street lenders. And sometimes communication with them can prove difficult. They will cut-and-run sooner and take what they can.

Finally, think through and make contingency plans for that very worst case scenario of losing your home through court action. What would you do, and where would you go? Consider all of your options. Talk to and include your partner in your discussions.

Once you have decided on a course of action, tell your family so they are fully in the picture and they have no nasty surprises should things get dramatically worse.

Part of a series of self-help articles on house-repossession. First published by 'NewsConfidential', November 2008.

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Consumer Credit Counselling Service Website: Telephone: 0800 138 1111

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