Recent research has brought to light that over the past year alone, a potential one million UK households have gone into further debt on a credit card in order to service their mortgage payments or their rent. That’s about 6% of Britain’s homes and in addition to the proportion of households, the findings also suggested that it is those people who are considered to be in lower social groups that are most likely to rely on their credit cards to keep a roof over their head.
Although this is the most at risk group, those considered to be middle class had also been affected by similar pressures. For these lower social groups, the number of people using their credit card to pay their household debt rose to 8% in the past year, while the number of those considered to be middle class reached 4%.
These findings have sparked an appeal for all those households that currently find themselves struggling to keep up with mortgage payments, rent or other regular, substantial outgoings, to seek help from a specialist debt advisor at the earliest opportunity. Obviously, mounting debt pressure and the associated stress make for an extremely uncomfortable situation. In addition to that, the fear of losing your home can back you in to a corner and leave you feeling that you have no other option. However, if you are in a situation where limited funds and spiralling debt are preventing you from making payments that keep a roof over your head, adding to your level of credit card debt isn’t the answer.
For those who had felt compelled to resort to their credit card in order to make their mortgage payments, the impending threat of homelessness has become a very realistic consequence. Going deeper into debt is an extremely short sighted answer to the problem of impending mortgage payments. After all, defaulting on your credit card repayments could well lead to your home being repossessed anyway. Mortgage lenders are now going to court more and more, looking to attain a charging order, allowing them to secure an outstanding, previously unsecured debt against the borrower’s home. Since the year 2000, the number of lenders applying to the courts for a charging order has gone up by a staggering 722%. It should be stated that, while the number of cases in which repossession arose as a result of this charging order are extremely rare, a lender could ask a court to order the sale of a property and liquidation of other assets to recover an outstanding debt. About three quarters of the 132,000 lender applications made in 2007 alone did result in charging orders being made.
So, although you could feel that you are safeguarding your home by covering your mortgage payments with your credit card, you could actually be placing it at greater risk. It’s essential that you talk to your lender at the very first sign of potential trouble. They can work with you to achieve a repayment schedule that you’ll find easier to service or arrange for a temporary injunction, giving you a little breathing space to get your finances in order. You could find that the equity that you have built up in your home would allow you to remortgage at a better rate. Talk to a specialist debt advisor about the solutions that are available to you. The dedicated team at Debtsolver is on hand to offer impartial debt help and aid you to finding a debt solution tailored to suit your circumstances. Using credit to settle outstanding credit is a destructive spiral that can lead to bankruptcy and repossession so get help to free yourself from debt. Visit Debtsolver now at www.debtsolver.co.uk
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