IVA Specialists Warning on Rent and Mortgage Arrears

Ministry of Justice figures, for England and Wales, have revealed that repossessions totalled 16600 in the third quarter of last year. IVA specialists are concerned about the 20% jump in the figures which is now reaching its’ highest level since early 2009.

It’s not just mortgage lenders and private landlords using the courts to remove people from their homes. Nearly a third of the repossessions were instigated by social landlords. It’s clear that whatever type of housing arrangements you have, mortgage lenders and landlords of all types are increasingly active in taking action on serious arrears.

Sadly a certain number of repossessions are inevitable. However the view of IVA specialists is that there will be a substantial number of people losing their homes that might not have ended up in this predicament had they made different financial decisions earlier.

IVA specialists are often frustrated to find that their clients have previously been using their limited income to repay unsecured creditors at the expense of keeping up with their mortgage or rent payments. Put under pressure by debt collection departments at banks and credit card companies, the clients that IVA specialists assist often make the mistake of failing to prioritise rent or mortgage payments over and above other types of less important credit.

Sometimes this is a panic measure to maintain access to fundamentally important things such as food. If you know you’ll need your credit card later in the month to buy food, it’s easy to understand why someone would pay their credit card in preference to their rent. While easy to understand, IVA specialists can quickly demonstrate to clients that this is often the wrong decision to make.

If you are struggling with debts, you must make sure that your rent or mortgage is paid before setting aside any money to repay credit cards, store cards, overdrafts and bank loans. A roof above your head is more important than avoiding pressure from debt collectors.

Of course the debt collectors will not just go away, which is where debt or IVA specialists may be able to assist you. Their job is to work with you to make sure a plan is in place to prioritise your spending. To avoid the threat of repossession, IVA specialists will see that mortgage and rent can be paid in full along with other priorities like council tax, utility bills, food, and so on. Only after these essentials are covered will it be possible to understand whether other debt payments are affordable.

Debt and IVA specialists use this factfinding process to offer you advice on your options. You may find that you can re-budget and keep on top of things yourself, look to start an informal debt management plan, or possibly even consider more serious steps like an IVA, DRO or Bankruptcy.

It will never be possible to stop all repossessions, but seeking debt advice from debt or IVA specialists at an early stage may be a big help in preventing the build-up of serious mortgage or rent arrears that can lead to repossession for some people who are struggling financially.

For further advice from IVA specialists you may wish to review the forum at IVAAdviceForum.co.uk where representatives from two different UK IVA specialists are on hand to answer your questions.

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