Newham

Second mortgages and secured loan arrears

Secured loans (second mortgages)

If you have taken out a secured loan repayable by instalments, read the section on mortgage arrears. Much of it also applies to secured loans. Differences are:
 
  1. Support for Mortgage Interest (SMI) can help towards secured loan payments only if the loan was for certain home improvements.
    Get more information on SMI for secured loans
  2. If your loan is covered by the Consumer Credit Act 1974 (if it is, it should say so on your loan agreement) and your lender has sent you an arrears notice or default notice, you can apply to court to reduce the interest on the loan and/or lengthen its term so that you pay less every month. This is known as applying for a Time Order. It is not straightforward so, if you are thinking of applying for a Time Order, get advice.
    Get more information on Time Orders
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Secured overdrafts

It is rare for a personal overdraft to be secured on a home. If you own a business and have a business overdraft however, it is likely to be secured against your home with no right to pay by instalments.
 
If the bank takes court action to repossess your home, the judge does not have the power to let you stay against the bank’s wishes. Contact the bank before the hearing to try to make an arrangement to pay by instalments.


If you are sorting out debt problems, start at the beginning of this guidance, otherwise you may miss valuable information.

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