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Page last updated at 14:30 GMT, Wednesday, 29 October 2008
How can I avoid repossession?

As the credit crunch hits, more and more people are finding they can't afford their mortgages and house repossessions have gone up by more than 70% in a year. Cy Coleman got in touch with Newsbeat as he's worried he's going to lose his house, so debt counsellor Chris Tapp offered him some advice.

For sale signs

I've missed two mortgage payments, what will happen?

Given that you've missed two payments now, missing the third payment is often a crucial tipping point. What is likely to happen is you'll get a letter from your lender saying that unless you're able to start making payments they will begin getting a repossession order.

There's a next step along again when you'll be issued with a letter asking you to go to court for a repossession hearing, at which they'll be hoping to get a repossession order which allows them then to repossess.

The third payment is due tomorrow and we're scrabbling around for the funds to try and meet it.

It's absolutely crucial you make sure you continue to communicate with the creditor so they can be as flexible as possible. You do actually have quite a lot of time to play with because it's a relatively long process for them to move to repossess.

The whole process does take between three to six months so there is still room for you to be negotiating with the creditor but also to be seeking help from elsewhere.

Is there no way I can take the arrears amount and spread it across the mortgage?

Certainly. And that's something, even if the lender won't agree to it outside of the court process, lenders will often in a sense be forced to agree to by the courts themselves.

There is still room for you to make your case to the court if you feel that over the course of the mortgage you will be able to afford to keep up the payments on your existing agreement if those arrears are spread out. Courts are now generally agreeing to that.

So going to court isn't necessarily bad news?

That's really important for people to understand. It's not the case that you as the borrower have no input into the court process. You're absolutely entitled and should be encouraged to engage with that process.

It is important that if you do end up going to court getting as good advice as you can possibly get. There are charities and organisations out there that offer exactly that sort of advice completely free of charge - like the Consumer Credit counselling service.

I feel more positive now.

It isn't the case that if you miss the payment tomorrow that the whole thing is a done deal. There is a lot more scope for negotiating with the creditor and using the court case to your advantage.

But it is absolutely vital that you continue to communicate with the creditor during that process and also continue to make the payments that you can afford.

Not making payments that you can't afford - we sometimes find people massively over-pay and leave themselves short in terms of paying the gas bill and the electricity bill - but making those payments that you can afford, to demonstrate that you are acting in the best possible faith to continue paying the mortgage.

If you are able to pay the mortgage off over the term, that stands you in very good stead if and when you need to go to court.

Chris Tapp was talking to Newsbeat's Catherine Burns.



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