Tuesday 15th of December 2009
Urgent action is needed by the government, lenders and regulators to prevent Britons in debt having their homes repossessed, a coalition of organisations has warned.
Sub-prime lenders who give credit to riskier borrowers are more likely to take action than high-street lenders, Shelter, Citizens Advice and AdviceUK state.
Indeed, those Britons who have a number of credit cards and personal loans with high-street lenders may have already been threatened with court action, or worried that this avenue will be followed.
Common questions on individual voluntary arrangements (IVA) often include whether repossession can be avoided with this repayment method.
Unlike bankruptcy, repaying debt through an IVA can protect a family home so long as certain conditions are met.
Low-income households are more likely to lose their homes, the group warns.
"This report makes it clear that not all lenders are showing forbearance and that additional protection is needed if we are to avoid a repeat of the repossessions crisis of the early 1990s," says Steve Johnson, chief executive of AdviceUK.
Another common question on IVAs is whether lenders can continue to contact borrowers. They are advised not to speak to customers without liaising through a specialist financial negotiator, which could put people’s minds at rest.
By Neil Burton
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVAs could help Brits manage high interest rates
