Few things are more devastating to families than the prospect of repossession. You own your home and you love it — it serves you well. Yet, due to unfortunate circumstances, repossession may seem imminent.
For local Tyne and Wear families facing repossession, the stress can be almost unbearable. Worse yet, the repossession process can take months or even years, stretching out the pain for longer than anyone wants.
Fortunately, you have options available to you here in Tyne and Wear — perhaps more options than you realise. There are many strategies that help for repossession in the North East; these are legal repossession avoidance strategies you can implement to help you resolve your repossession issue so you can get on with your life.
In this blog post, you’ll read about 3 ways that you can avoid repossession (there are other ways to avoid repossession as well). The goal of these strategies is to help you legally and ethically avoid repossession and reducing the pain and frustration that you’re facing, while minimising any long-term financial commitment or burden to you. Not all of these strategies will apply in every situation but you’ll probably be able to find at least one of the three ways that will work for you.
Strategy #1: Work out a deal with your lender
The first strategy is called a “repossession workout”. In a repossession workout, you’ll sit down with your lender and tell them that you don’t think you can pay your current mortgage obligation but you’d like to figure something out so you can stay in your house and continue to pay your mortgage.
Contrary to popular belief, lenders don’t want to repossess! They want happy customers who pay their mortgages, so lenders are often willing to work with homeowners to figure out a deal. Plus, the repossession process is extremely costly to the bank. This might include a temporary reprieve on your mortgage payments, or it might include a catch-up strategy where your outstanding mortgage payments are spread out so you can catch-up and pay them off, or perhaps a restructuring of the outstanding amounts that you owe.
Strategy #2. Bankruptcy
Filing for bankruptcy may seem like an extreme measure but it is one of the “tools” in your repossession avoidance toolkit. When you file for bankruptcy, you indicate to all of your creditors that you are no longer able to pay your bills. Filing for bankruptcy will put a stop to the repossession process because all creditors must stop the collection process.
Filing for bankruptcy, though, is a little extreme: it may require you to sell off some of your assets in order to pay off your creditors. And, a bankruptcy will remain on your credit score for many years, which could impact everything from getting a loan to getting a car… even getting a job.
However, this is really just a delay tactic, as it means the bank will have to go through the bankruptcy solicitors before taking the house back. So it isn’t really any way to get out of repossession, and really just leaves you in the exact same situation. However, it will delay the inevitable.
Strategy #3. Short sale help for a repossession in the North East
A short sale is the third strategy — this is where you sell your home and put the proceeds of the sale toward the amount owing on your mortgage loan. A short sale is the preferred method for people facing repossession because it is proactive, fast, and very effective.
- It’s proactive, which means that you take matters into your own hands (that’s a major stress eliminator because so much of the stress of repossession comes from the process being completely out of your control).
- It’s fast — in some cases, you can sell your home in as little as a week! That’s also because it’s local: You can get help for repossession in the North East since organisations like North East House Buyers help people going through short sales.
- It’s very effective because a short sale can completely wipe out (or almost wipe out) the amount owing on your mortgage. If there is any amount left over that is not covered by the sale of the property, you’ll be responsible for it (although you can sometimes work out a deal with your lender).
With a short sale, you still end up with the reality of having to leave your home but there is a bright side: The impact to your credit is much less (compared to a bankruptcy or a repossession) so this is a smart long-term play to give yourself some options.