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1 Dealing with Debt

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1. Introduction

2. Rent or mortgage payment problems

If you have missed your rent or mortgage payments, landlords and mortgage lenders may have the right to evict you. But the procedure for doing this, called 'possession proceedings' is quite long, and you should have enough time to come up with a plan to make reasonable repayments to your landlord or your mortgage lender before the court gets involved.

If you have a second mortgage or a loan secured on your home that is regulated by the Consumer Credit Act 1974, and the lender refuses your payment plan, you may be able to get a 'time order' through the courts, which will let you keep your home. Under a time order, the court can reduce or even stop the interest that is adding up on the money you owe, and reduce the instalments you pay to a level you can afford. You have to show the court that you are having genuine difficulty making the payments. You may also have to show that you would be able to pay the full instalments again at a later time. The court will grant you a time order only if it thinks this would be fair, after hearing how you and the mortgage or loan company have dealt with your debt.

For more details, see 'Time Order'.

Possession proceedings (eviction)
The possession procedure starts with a notice from your landlord or a solicitor's letter on behalf of your mortgage lender warning you that they could take you to court. After that you will receive a county court claim with a date and time for you to attend the local county court. At the court you will have to explain your situation to a judge and what you plan to do.

The court will need to see that you have missed payments, and that your landlord or mortgage lender used the proper procedures in trying to get the money you owe. If your landlord has not done what they should have done for you (for example, they didn't do repairs your house or flat), the court may not make a possession order.

If you are a local authority (council) tenant, and unless you have what's called an 'Introductory tenancy', the court must decide if an order is reasonable. It will take account of whether you are vulnerable (for example, if you are elderly) and whether you have tried to make payments.

If your landlord or mortgage lender proves their case, then the court usually grants a possession order. If you start making the payments again and offer some money towards the arrears (what you owe), the courts will normally make a 'suspended possession order'. This means the landlord or mortgage lender won't be able to evict you, as long as you make the payments stated in the order.

The court can allow you to pay off the mortgage repayments you've missed over the years you have left on your mortgage if it believes this would be the fairest thing to do. It can also let you clear any payments you've missed on your council rent, depending on how much you can afford to pay.

If you then miss payments, the landlord or mortgage lender can ask for an eviction warrant. You won't be warned of the warrant beforehand, although the court should warn you of the eviction date. At this stage, you can still ask for a court hearing to ask the judge to call off (suspend) the eviction. You should do this before you eviction is due, because after that, your application will probably be refused. You will need specialist legal help if you are in this situation.

In some situations this procedure does not apply. The court will automatically award the landlord possession, which cannot be suspended, if:

  • you have an 'assured shorthold' tenancy from a private landlord (not the council or a housing association, for example); and
  • you have missed more than two months' rent payments; or
  • you have an 'introductory tenancy' from a public landlord (normally, a local council).

There can be other reasons why the court can award a possession order. For more on tenancy types and rights, see the Community Legal Service leaflet 'Renting and Letting'.

Also see the Community Legal Service Leaflet, 'The Human Rights Act', which explains the Act and how it may affect you.  This law gives everyone the right to 'respect for privacy and family life, home and correspondence'.  It doesn't mean that you cannot be evicted, but the courts may see eviction more as a last resort.

3. Council Tax bill problems

4. Hire Purchase (HP) problems

5. Gas, electricity and phone bills

6. Water bills

7. Loan and credit problems

8. What creditors can do to get their money

9. Going to court

10. Dealing with many debts

11. Dealing with bailiffs

12. Other legal protection if you are in debt

13. When you can be sent to prison for your debts

14. Terms used when dealing with debt

15. Further help

16. About this leaflet

This leaflet is published by the Legal Services Commission (LSC). It was written in association with Birmingham Settlement.

The leaflets are regularly updated but the law may have changed since they were printed so the information in them may be incorrect or out of date.

Leaflet Version: April 2019

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