Help with Debt
Debt and Your Home
Your home is one of the most important things you can own, so protecting it is always a top priority for many. However, if you are struggling with debt, your home can end up at risk, and protecting it can become challenging.
Fortunately, many debt solutions minimise the risk of losing your home, whether you own it outright, pay a mortgage, or rent. Even so, we’ve created this short guide below to help you know how you can best protect your home when dealing with debt.
IVAs, Trust Deeds, and your home
One of the main advantages of Individual Voluntary Arrangements (IVAs) and Trust Deeds is that, if you stick to the terms of you plan, you are able to keep your home. Whereas with sequestration or bankruptcy, your house will normally be sold and the money used to pay back your debts.
However, you may be asked to release money from your home as part of a Trust Deed or IVA. This means taking a step backwards in the process of paying off your mortgage, but it does allow you to keep your home.
If you are able to release any money from your house, it will be brought into your plan to help pay back more of your debts overall.
Using your home for debt consolidation
It is possible to use the value of your home to help with your debt, but this can put your home at risk and should be considered carefully.
If you have enough value in your home to clear your unsecured debts, you might choose to release this by remortgaging the property. This is a good solution for some people, but you could run the risk of losing your home if you find yourself unable to keep up with the adjusted mortgage payments.
Most debt solutions should not affect your tenancy or ability to rent a property. You also do not need to tell your landlord if you enter into a debt arrangement.
Rent arrears cannot usually be included in an IVA or Trust Deed, However, these debt solutions reduce your monthly debt payments, meaning you can free up more money to cover necessities like rent and ultimately, your rent arrears.
Debt can affect those who own their homes in many ways, so it’s important to seek professional advice before deciding how to tackle your debt.
You can find out more about how debt can affect your home below.
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