This section contains useful information for people with mortgage arrears or debts secured on their home.

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1 This section contains useful information for people with mortgage arrears or debts secured on their home. Getting behind with mortgage payments Contact your lender if you have problems FSA rules and the Mortgage Code Help towards paying your mortgage Arranging to clear the arrears What if I can t afford my mortgage? What if my home is not worth enough to repay the mortgage? Mortgage shortfalls What should I do if I have a mortgage shortfall? Second mortgages or secured loans What is a time order? Secured overdrafts What if my mortgage lender takes me to court? How to stop an eviction. Mortgage arrears are very important because you could lose your home if you do not pay them off.they must be treated as a priority debt. Getting behind with mortgage payments This section is for people with mortgage arrears.you may have a first and second mortgage. The first mortgage is the loan you took out to buy your home. The second mortgage (also known as a secured loan, further advance, second charge or sometimes a consolidated loan plan) is a separate loan which is secured on your home. Check all your loan agreements to see if they are unsecured or secured on your home. If they are secured loans, treat them as priority debts because lenders can ask the court for possession of your home if you cannot pay your monthly instalments.the property can then be sold to pay off your debt. The legal term for the company or building society who gave you your mortgage is a mortgagee. In this pack we call them lenders. 35

2 Contact your lender if you have problems It s never too early or too late to contact your lender.you may not be behind yet or your lender may have started court action.whatever the situation, do not delay in contacting your lender. Get in touch as soon as possible by writing, phoning or making an appointment to see them. If the local office is unhelpful or difficult, contact their head office and try to reach an agreement with them. If you have not paid the mortgage for a number of months, it s very important that you start paying what you can, even if you can t afford the full monthly payment. FSA rules and the Mortgage Code Most lenders are now regulated by the Financial Services Authority.The FSA rules say a lender must deal fairly with any customer who is in arrears. The rules also need a lender to: have a written policy on how to deal with customers in arrears; set up a payment plan which is practical in terms of your circumstances and which covers the rest of the term of your mortgage, where appropriate; send you regular information about your arrears; and not put pressure on you through too many telephone calls or letters. If you think you are being treated unfairly by a lender, you can complain to The Financial Ombudsman Service.The contact details are at the pack of this pack. More information The FSA rules have now replaced the Mortgage Code but you may still be able to complain to the Financial Ombudsman Service under the Mortgage Code if your mortgage was taken out before 31 October 2004 and your complaint is about events that took place before this date.the Mortgage Code included a commitment to consider all cases of financial difficulty and mortgage arrears sympathetically and positively. If you want more information about the Mortgage Code, contact us for advice. Help towards paying your mortgage Increasing your income You may be able to claim other benefits such as Income Support, Pension Credit, Jobseeker s Allowance,Working Tax Credit and Child Tax Credit. See page 7 for information on increasing your income. Contact your local Department for Work and Pensions office or local advice centre for more information or contact us. Mortgage payment protection insurance important now that you can get less help with your mortgage payments from Income Support, Pension Credit and Jobseeker s Allowance. If you are turned down by the insurance company, contact us for advice. Mortgage rescue schemes Some lenders offer mortgage rescue schemes.these involve buying back your home so that you become a tenant, or part-rent and part-buy schemes. (These are also known as shared ownership schemes.) Mortgage rescue schemes are rare. Contact your lender to see if they run a scheme.you can also ask the Housing Corporation for details of local housing associations who may run a scheme, and ask your local council housing department. The address for the Housing Corporation is listed on page 58. Help from Income Support, Pension Credit and Jobseeker s Allowance If you claim Income Support, Pension Credit or income-based Jobseeker s Allowance, the Department for Work and Pensions will normally pay at least some of the interest on the mortgage if you took the mortgage out to buy your home. The following rules apply. From December 2004, mortgage interest is paid at a standard rate set by the Government and based on the Bank of England base rate, not at the rate you actually have to pay. If your interest rate is less than 5%, there are special rules that may apply to you. Contact us for advice. All mortgage interest payments are sent directly to your lender by the Department for Work and Pensions (DWP), unless your lender is not part of the scheme agreed with the DWP. You can only claim interest on the first 100,000 of your mortgage, unless the extra was taken out to adapt your home for someone with a disability. There is no help with payments towards the original amount you borrowed (capital) on your mortgage or any endowment policies or with any interest on arrears built up during the waiting period of your claim (see below). Existing borrowers If you took your current mortgage out before 2 October 1995, you will generally have to wait eight weeks before getting any help with mortgage interest payments when you claim.you will then only get half of your mortgage interest paid for the next 18 weeks (four months) of your claim. After this, you will have your mortgage interest paid in full. New borrowers If you took out a new mortgage, or remortgaged, after 2 October 1995, you will generally get no help at all with mortgage interest payments for the first 39 weeks (nine months) of your claim.you will then have your mortgage interest paid in full. Check that you have claimed under any mortgage payment protection insurance you may have.this is particularly 36

3 Special rules If you or your partner are aged 60 or over, the Department for Work and Pensions will pay the interest in full immediately with no waiting time as part of your claim for Pension Credit. You will be treated as an existing borrower and not have to wait the full nine months if: you don t have to sign on because you are caring for someone who is sick; you have had a mortgage payment protection insurance claim refused because of pre-existing illness or HIV- or AIDS-related illness; you are a prisoner on remand; or you have a child living with you and you are claiming Income Support because your partner has died or has left you and is not providing any kind of financial support. Other help from Income Support, Pension Credit and Jobseeker s Allowance You may also claim Income Support, Pension Credit, Jobseeker s Allowance for the interest on the following. A loan that was used for home repairs and improvements. You will still have the same waiting periods (see above). Only certain repairs and improvements count, such as adapting your home for someone with a disability. If your claim is turned down, you can appeal against the decision. Contact us for advice on whether it is worth appealing. A mortgage which is in somebody else s name, if they are not paying and you have to pay the mortgage to keep your home.the Department for Work and Pensions will decide if it is reasonable for you to pay. If you are in this position, contact us for advice. A new mortgage with any lender for the same amount or less than your existing mortgage as long as this is the only remortgage since 2 October 1995.This rule applies from 28 November Other housing costs such as ground rent and some service charges. What will Income Support, Pension Credit and Jobseeker s Allowance not help with? You cannot normally claim for help for: the full interest on a remortgage for more than the original loan that was used to buy your home, unless the extra was used for certain home improvements (see above); a mortgage or secured loan if the money was used to pay off other debts, fund a business or buy a car or holiday; interest on a larger loan taken out while you are on Income Support, Pension Credit or Jobseeker s Allowance or within 26 weeks of coming off benefit (only the interest up to the amount of your original loan will be covered); If they decide your housing costs are too high because your home is larger or more expensive than you need; or the full interest on a mortgage if you have adults living with you who are not part of your household.the Department for Work and Pensions calls them non-dependants, and will usually take an amount from your mortgage interest payment depending on the circumstances and age of your non-dependants.the non-dependant is then expected to make up the difference. In some circumstances no non-dependant deduction will be made (for example, if you or your partner are blind or receive Attendance Allowance or Disability Living Allowance because you need care). Contact us for advice. If you are on Income Support If you have been on Income Support continually from before 2 October 1995, the amount of help you receive is protected. This is called add back.this rule is complicated and the help you receive can disappear over time. Contact us for advice. If you have more than a 12-week break in your claim from August 1999, you will lose your protection and your housing costs.any new claim for benefit will be paid under the new rules. What else can I do if I am on Income Support, Pension Credit or Jobseeker s Allowance? If you are in arrears and your lender is threatening to take court action, you should take the following steps. Ask your lender if they will accept direct payments if they do not already receive them. Get a complete breakdown of how your housing costs have been worked out by the Department for Work and Pensions (DWP) if your full mortgage is not being paid. Make sure you know how much you have to contribute for the capital or endowment part of your mortgage.you may also have to pay towards the interest on your mortgage if the standard rate the DWP pay is less than your actual interest rate.your lender may expect you to make up the payments from your benefit.there may be deductions being made because of non-dependants living with you. Check these deductions have been made correctly by contacting your DWP office, or contact us for advice. Tell your lender you are on Income Support, Pension Credit or Jobseeker s Allowance. Most lenders are now regulated by the Financial Services Authority.The FSA rules have replaced the Mortgage Code but you can still complain to the Financial Ombudsman Service under the Mortgage Code if your mortgage was taken out before 31 October 2004 and your complaint is to do with events before that date. Standard-rate interest Mortgage interest is paid at a standard rate set by the Government, not at the rate you actually have to pay.all your interest may not therefore be covered unless your interest rate is less than the standard rate. 37

4 If the lender takes you to court, ask the court not to make a possession order because the DWP are paying your mortgage interest. See What if my mortgage lender takes me to court? on page 41. If the head office will not agree to stop court action, contact us for advice. Got a question? Help with mortgage interest If you are not sure that you are getting all the help with the mortgage interest that you should, contact a local advice agency or contact us. You may be able to appeal against the decision of the Department for Work and Pensions. Arranging to pay off the arrears Don t take an extra loan Don t be tempted to take out an extra loan to repay your mortgage arrears. Often these are very expensive and could put your home at greater risk. Contact us for advice You will usually have to offer an extra monthly payment to clear the arrears. Lenders will sometimes ask for the arrears to be cleared over 12 to 24 months. Ask for a longer time to pay the arrears if you cannot afford to do this. If you cannot manage to clear the arrears within the time the lender wants, start paying the amount you have offered anyway. Explain why you can t pay the amount they have asked for, particularly if there are circumstances such as a long-term illness, birth of a child, relationship breakdown or unemployment. If the value of your home is far more than the total mortgage, tell the lender.the more your house is worth, the less risk your lender is taking.a recent court of appeal case (called Cheltenham & Gloucester v Norgan) says in this situation a reasonable time to pay back the arrears could be the whole lifetime of your mortgage. If this applies to you, tell your lender. Contact us for advice. If your home is not worth as much as the mortgage, see the section on page 39. Other arrangements you could consider Sometimes your lender may agree a different arrangement. Some of these are set out below. Adding the arrears to your mortgage This is called capitalising the arrears. Normally you can only do this: on first mortgage arrears; and if the value of your property is a lot more than the total amount of your mortgage. It works as follows.the amount of the arrears is added to the total mortgage.the monthly repayments are increased to take account of this. So the arrears are spread over the years you have left in your mortgage term. Your lender may be more likely to agree to this if you have already kept to a payment agreement for some months, because this shows you are able to pay. Changing to a repayment mortgage If you have an endowment mortgage, you may be able to change this to a repayment mortgage. Endowment mortgages include an insurance policy and if you have had this policy for a few years it may have a surrender value.the surrender value is the amount of cash the policy is worth if you cancel it. Ask your lender about this and get independent financial advice on whether: it is a good idea to cash in or sell your endowment policy; and changing to a repayment mortgage will reduce your monthly payments. There are also other companies in the market who will buy insurance policies at higher rates than the insurers will pay in surrender value. If you decide to sell and the policy is assigned to your mortgage company, you must ask them to release it before you can cash it in. If you cancel your endowment policy, ask your lender about a mortgage protection insurance policy.this would pay the mortgage if you died. If you do change to a repayment mortgage, you could also ask your lender to extend the mortgage term (see below). Get financial advice If you are thinking of cashing in your endowment policy or changing to a repayment mortgage, you should always get independent financial advice.there may be a charge for the service. For a list of independent financial advisers in your local area contact the IFA Promotions office.the number is listed on page 58. Increasing the mortgage term Most mortgages are spread over 25 years this is called the mortgage term. If you have already lived in your home for several years, you could ask your lenders to extend the term back to 25 or even 30 years.this could cut the monthly payments so that you could afford to pay something towards the arrears each month. If you have an endowment mortgage, this may be more difficult. Ask your lender. Paying off the interest only If you have a repayment mortgage, you could ask your lender to accept a monthly payment which covers only the interest part of the normal monthly payment.this will probably have to be a temporary arrangement. If you already have arrears, your lender will expect small monthly payments off the arrears as well. What else can I do? You should make sure that you are getting all the help which is available.you may be able to claim Income Support, Pension Credit, Jobseeker s Allowance,Working Tax Credit or Child 38

5 Tax Credit (see page 7). Contact your local Department for Work and Pensions office for more information. Or contact us for advice. What if I can t afford my mortgage? Many people find that because their mortgage is high or their income has fallen, they can t pay the monthly instalments. If you are in this situation: explain the problem to your lender; pay what you can afford; and look for ways to increase your income. Handing back the keys Handing back keys You may be thinking about handing the keys back to your lender or selling your home. Contact us for advice. This may not be a good idea. If you give your home back to your lender, you will still be charged the monthly instalments on the mortgage. If you do not pay, your lender will add the instalments to the debt you owe when the house is sold.they can also add extra interest on to the arrears figure.the monthly instalments will only stop being added when your lender sells your home.this could take a long time.the lender will probably add solicitor s and estate agent s fees and any court costs on to the bill. Your lender will probably get a lower price for the house than if you sold it yourself. It is harder to get a buyer for an empty house. Empty houses are more likely to be vandalised or damaged. If you give up your home and ask your council to rehouse you, they will probably say that you have made yourself intentionally (deliberately) homeless and refuse to offer you anywhere to live. Contact us before you do this. See Getting rehoused on page 56. Selling your home If you are thinking of selling your home, you need to think about where you will live. Can you trade down by selling your home and buying a smaller property? If you sell your home and ask your local council to rehouse you, they will probably say you have made yourself intentionally homeless and so refuse to offer you anywhere to live. See Getting rehoused on page 56. Look at renting from a housing association as an option. Private renting may be an option but you need to be careful about the type of tenancy you are offered and how high the rent is. Sometimes if you claim Housing Benefit (rent rebate), your council can decide that your rent is too high and restrict the amount of benefit they will pay you. You may have relations or friends that you can live with, at least temporarily. Contact us before you put your home on the market. See Getting rehoused, on page 56. What if my home is not worth enough to repay the mortgage? If your home is not worth enough to repay the mortgage in full, this is often known as having negative equity. If you have negative equity, your options can be limited.your lender should consider allowing you to sell your home yourself under the FSA Mortgages: Conduct of Business Rules. For a fact sheet on Negative equity, call National Debtline on If you hand back the keys or your lender repossesses, they will sell the property. If your home is not worth enough to repay your mortgage, your lender can ask you to pay the difference. This is usually called a mortgage shortfall (see below). Mortgage shortfalls When you bought your home you may have made a one-off payment to your lender for indemnity insurance.this is known as a mortgage indemnity guarantee. From 31 October 2004 these are known as higher lending charges under the FSA rules.this means that if the lender repossesses and sells your home for a price which does not clear your debt to them, they can claim any loss from an insurance company. Indemnity policies The indemnity policy is usually insurance for your lender, not for you.the insurance company can ask you to pay them what they have paid out to the mortgage lender. The indemnity policy may only cover the lender s loss to a set limit. So, if your debt is much bigger than the sale price of your home, you may still owe something to the lender, as well as the insurance company. The lender and the insurance company often club together and one company will chase you for the whole debt. Most second mortgages are not covered by an indemnity policy. Even if you repay your first mortgage from the sale, you may still owe something to your second lender, as well as the insurance company. The insurance company can ask you to pay them what they have paid out to the mortgage lender. Indemnity policies often vary, so contact your lender to find out whether you have paid for a policy and what its terms are. 39

6 What should I do if I have a mortgage shortfall? After six years If the lender first contacts you over six years from the date your house was sold, it may be too late for them to recover the debt if they are members of the Council of Mortgage Lenders. Before getting in touch with the lender, contact us for advice. You have options on how to negotiate with the lender. You could: make an offer of payment; or ask the lender to accept a small lump sum and write-off the rest (this is called an offer in full and final settlement ). They could: reject your offer, and take you to court to set a level for you to repay; claim on their indemnity policy if they have one; or ask for you to agree to a legal charge (a type of mortgage to secure the debt) if you have bought another home. If you are in a rented home and have no assets (valuable goods or savings), explain this to your lender or the insurance company.they may decide not to take any further action. For a fact sheet on Mortgage shortfalls, call National Debtline on Second mortgages or secured loans You may have a second mortgage or secured loan. Even if you are paying your first mortgage in full, if you don t keep up with payments on the second mortgage, you could lose your home. Second mortgages tend to be at higher interest rates than first mortgages and run for shorter periods, for example, five or 10 years.this makes them expensive and also means that the monthly payments will be higher. If your home is worth more than your mortgage, it may be worth asking your first lender if they could offer you a remortgage.this means giving you one new mortgage instead of the two you already have.this may be helpful as the new monthly mortgage payment should be cheaper than the two previous payments added together. Before signing any agreement, contact us for more advice. You may be able to claim Income Support, Pension Credit or Jobseeker s Allowance to cover the interest on a second mortgage, if it was for certain home improvements. See Help from Income Support, Pension Credit or Jobseeker s Allowance on page 36. Contact us for advice. If your second mortgage company takes you to court see What if my mortgage lender takes me to court? on page 41. Some lenders charge very high interest rates or have contracts with a higher interest rate if you miss payments. You may be able to argue this is an unfair contract term. Contact your trading standards department or contact us for advice. What is a time order? With some secured loans you can apply to the court for a time order.a time order is particularly useful if you have a secured loan at a high rate of interest and large monthly instalments that you cannot afford.the court could reduce the monthly payments, extend the term of the loan, and even change the interest rate. But the court can only make a time order if: the amount you originally borrowed was less than 15,000. (on agreements taken out on or after 1 May 1998, the limit is 25,000); and the lender has called in the loan.this means they have sent you a default notice demanding you pay the full amount you owe within a fixed period of time. You can still apply for a time order after your lender has taken court action. Courts do not make time orders very often, but may be more likely to help following a recent court decision. You should get detailed advice from a local advice centre or contact us before you apply to the court.you may need to pay a fee to do this (see box below). Fees to pay to the court If you want to ask the court for a time order, you may need to pay a fee, unless you are on Income Support, income-based Jobseeker s Allowance or if you receive the guarantee credit element of Pension Credit.You don t have to pay the fee if you get Working Tax Credit with Child Tax Credit or if it includes a disability element and your income is below a set amount. There is an application form called an EX160 to fill in to ask the court to agree for you not to pay the court fee if it will cause you hardship or because you are on benefits. If you can t afford the full monthly payment on your secured loan and think you may be able to apply for a time order, contact us for advice. For a fact sheet on Time orders, call National Debtline on Secured overdrafts You may have a bank overdraft secured on your home (for example, because you have a small business).this may have high interest charges and no fixed monthly instalment to pay. If the bank takes you to court, it may be difficult to suspend a possession order to pay off the overdraft in instalments. If you have an overdraft secured on your home, contact us for advice. 40

7 If a bank is asking you to agree to secure an overdraft on your home, see Debts with your bank on page 29, and contact us for advice. Beware of consolidation loans Beware of advertisements in newspapers and on television offering loans to clear all your debts (often called consolidation loans ).They are often very expensive and will put your home at risk. What if my mortgage lender takes me to court? You cannot be evicted from your home without a court order. If you have left your home voluntarily, the lender might be able to take over the house and sell it without going to court first. Court procedures are the same for first and second mortgages (secured loans), so the following advice applies to both. Before the hearing These are the usual stages leading to action in the county court. When you have mortgage arrears, the lender will write asking for you to pay them. If you have not already contacted your lender, do so now and try to reach an agreement. If you don t contact your lender to agree an arrangement to pay the arrears, they will write again.they may refer the matter to their solicitor who will write to you and sometimes send a calling-in notice or default notice.this asks you to pay off the whole debt. Contact the solicitor and try to negotiate a way to pay the arrears. If the solicitor rejects your offer, you can insist that they tell the lender about your offer. Or, contact the lender s head office directly yourself to try and reach an agreement. Even if your lender refuses your offer, start paying the amount you have offered anyway. Court papers If you have not reached an agreement, the lender will apply to your local county court to issue a possession claim which will give you a date and time for a hearing in the county court.you should have at least 28 days notice of the hearing date. (This doesn t mean you will automatically lose your home.) Even if the court decides you cannot afford to stay there, you will not be evicted from your home on the date of the hearing. A document called particulars of claim will be sent as well.this sets out your lender s case for taking possession of your home.you will also receive form N11M called a defence form which you should fill in and return to the court within 14 days. Filling in the defence form It is important to fill in the defence form as you can give the court a full picture of your finances and what you can afford to pay as well as say if you disagree with the amount claimed. Check the details of your lender s claim to see if you agree with them. Say if you think that the information is wrong.you will be asked how much you can afford to pay off the arrears. Use your personal budget sheet to work out how much you can afford to offer. Put down an amount which you can afford, even if your lender has already refused your offer. Use the personal budget guidelines on page 10 of the pack to fill in the financial details on the form. You have a chance to explain why you got into arrears. If you are hoping that your circumstances will improve in the future, or you want time to be able to sell you home, then say so in the space provided. It is still worth sending back the reply form even after 14 days if it will reach the court before the hearing date. to keep a copy. Start paying what you have offered It s important to start paying the amount you have offered. You can still negotiate with your lender or their solicitor. If you can reach an agreement, the hearing date can be put off ( adjourned ) to give the agreement a chance to work. The hearing No eviction at the hearing You will not be evicted from your home on the day of the hearing. You should go to a court hearing even if you have made an agreement with your lender. If you will not be able to go to the hearing because of illness or disability, write to the court to explain your circumstances and ask if a relative or friend can represent you. (Don t forget to include the case number in the letter.) The purpose of the hearing is to decide on an arrangement which is fair for both sides, not to find anyone guilty or innocent. Mortgage arrears should be dealt with in private with only you, the lender s representative and the district judge at the hearing.the district judge is the person who decides your case. Call them Sir or Madam. When you go to court Make short notes about what you want to say at the hearing. Take these with you and refer to them if you need to. If your circumstances have changed since you filled in the court form, work out a new personal budget sheet. 41

8 Take three copies of your personal budget with you (one for you, one for the district judge and one for the lender s representative). If English is not your first language, you could take an interpreter with you. Don t be afraid to approach the lender s representative before the hearing to see if you can come to an agreement to present to the district judge. But don t be pressed into offering more than you can afford.the district judge may agree with you and allow you to pay less than the lender s representative wants. Answer questions clearly, calmly and fully.this will help the district judge make their decision. you have as much right to put your case as the lender. What you should ask for If you can pay all the arrears in a short time, for instance through a remortgage, ask for an adjournment. If you don t agree with the arrears figure, ask for an adjournment so that the lender can provide a detailed statement of your account. Extra costs Watch out for extra costs being added on for each hearing you go to.you may be able to ask the district judge to order that the lender pays their own costs, for example, if their figures are wrong or they have not followed correct procedures and your hearing has to be adjourned. Contact us for advice. If the amount of arrears is agreed, make an offer of repayment that you can afford. But remember the district judge will usually expect you to repay the arrears within a reasonable period which depends on your circumstances. If your offer of repayment will take longer than three to five years to clear the arrears, explain to the district judge why you cannot offer more and point out the figures shown in your personal budget. A recent court decision (called Cheltenham & Gloucester v. Norgan) means you may be able to pay your arrears over a longer time, even the whole lifetime of the mortgage. Contact us for advice. If the district judge thinks your offer is reasonable, they will probably make a possession order but it will be suspended if you agree to pay the normal mortgage payment plus an extra monthly amount off the arrears. If you keep to these payments, the lender cannot take any further action. If the court does not accept your offer, you could ask for an adjournment to give you time to sell your home yourself. Show the court proof that your home is on the market, such as a letter from the estate agent.this may be better than letting the lender take possession, and sell your home. But before doing this, read Getting rehoused on page 56. Contact us for advice. longer period (for example, three months).this will give you time to sell the house yourself. If the court will not accept this either, the district judge can make a possession order, which allows you a set period, usually 28 days, before your lender can take any action. See How to stop an eviction on this page. If this happens, you can ask the court to give you longer than 28 days to find somewhere else to live. What if I can t pay the order? If at any time you find you cannot pay the amount which the court has ordered, you should go back to the court and ask for the order to be changed. Use the form N244, available from the court office.there will be a fee to pay to make this application.you do not have to pay a fee if you are on certain benefits. See How to stop an eviction below.you should also contact your lender and try to make a new arrangement. How to stop an eviction The court will not take action to evict you unless your lender asks it to. Contact your lender immediately if: you have not kept up the payments under a suspended possession order; or the time period given on a possession order has run out. Try to make an arrangement with your lender. If you cannot reach an agreement, your lender can apply to the court for a warrant of possession.you should be given a notice of eviction by the court bailiffs giving you a date and time when they will come to evict you. You may be able to stop this, but you must act quickly. If you need more time to sell, to find somewhere else to live, or want to make a renewed offer to pay the arrears by monthly instalments, you should apply for the warrant to be suspended on court form N244.This is a general application form you can get from your local county court.you should fill in the N244 form including: writing the claim number of the case; writing the warrant number; giving the reason you ve not been able to pay and your new offer (in part A on the front of the form); in part B, ticking the box saying you rely on evidence in part C ; in part C on the back of the form, attaching your personal budget or write it out on the form; signing the statement of truth at the end of the form. Do this as soon as possible to allow the court time to arrange a hearing. There will be a fee to pay the court, see the box on page 43. Even if the district judge won t adjourn to give you time to sell, you can ask them to postpone the possession order for a 42

9 Fee to pay If you want to ask the court to suspend the warrant of possession, you will need to pay a fee, unless you are on Income Support, income-based Jobseeker s Allowance, or if you receive the guarantee element of Pension Credit,Working Tax Credit with Child Tax Credit or you receive a disability element and your income is below a set amount.there is an application form called an EX160 to fill in to ask the court to agree for you not to pay the court fee if it will cause you hardship or because you are on benefits. The court may refuse to accept an application within 48 hours of the eviction time. If the court refuses your application because it is late, contact us for advice. Suspending the warrant You can apply to suspend the warrant for the following reasons. To make a new offer of payment on your arrears. Make sure you don t offer more than you can afford.work out a new personal budget, and send it with the form. To ask the court to give you more time to sell. To ask the court to give you more time to find somewhere else to live. The court will set a date for a hearing, usually before the eviction date. You must go to this hearing or the court is unlikely to suspend the warrant. If any further warrants are issued, you may still be able to ask the court to suspend them (for example, to give you time to find somewhere else to live). If all your efforts to stay in the property fail, you will be given an eviction date. If you are in this position, contact us for advice. Try to move out before the eviction date because the bailiffs can force their way in if they have to.they do not need to remove your furniture and possessions, which will stay locked in the property.you will then have to get the lenders permission to enter the property again in the future and arrange to remove your furniture. Some lenders try to argue that they can keep any belongings left in the house. It is safer to remove all that you can before the eviction date. If your lender is refusing you permission to remove your furniture, contact us for advice. They must use the money from the sale to pay off the court costs, estate agent s and solicitor s bills, the mortgage and any second or third mortgages. The lender must tell you in writing how the money has been spent. They must send you any money which is left over. to give them a new address. Mortgages are paid off in the order you took them out. If the sale of your home does not raise enough money to repay the first mortgage and any other mortgages plus all the costs, you may still owe some money to the lender. See What if my home is not worth enough to repay the mortgage? on page 39.Your lender could take court action against you to collect the rest of the debt using the same court procedure as credit debts.this is set out on page 31. Complaints Your lender should have their own complaints policy which you can use if you feel that at any stage your lender has acted unfairly. If you are not happy with the outcome of your complaint, you can contact the Financial Ombudsman Service.The address is on page 58 of this pack.the Financial Ombudsman Service will look at whether your lender has followed the FSA rules which came into force on 31 October 2004 that cover lenders.they can also look at complaints about events that took place before that date under the terms of the old Mortgage Code. If this applies to you, contact us for advice. Pay your mortgage first You must pay your mortgage before credit debts such as bank loans, credit cards, door-to-door collectors, or overdrafts which are not secured on your home. If your mortgage arrears and other priority debts use up all your money for creditors, and there is nothing left to offer on your credit debts, tell your creditors this and send them a copy of your personal budget. See How to work out offers of payment on page 24. After you are evicted your lender will still add interest to your mortgage account until the property is sold. Your lender must do the following. They must follow FSA rules and sell your home for the best price that might reasonably be paid taking into account factors such as market conditions. However, sale by lenders is likely to produce a lower price than if you sold it yourself. 43