How Will Falling Property Market Affect Those In Serious Debts?

TC — Mon, 30 Nov 2009 12:18:28 +0000

I own a property in Bristol and have just looked on Hometrack to see if similar properties in the area are selling and if so, what sort of prices they are selling for. The results of my search were not great. A couple of properties just up the road from mine have sold in the last few months for £10k less than I bought my house for in October 2006. So what does this mean for me? Well it means on paper I’ve lost money.

But how does this affect people with serious debts? Well, if there are others in a similar situation, whereby the small amount of equity they had in their property has been eroded by falling house prices, they should take some pleasure from knowing that their creditors won’t be able to take any money from their house as there is no money in it!

However, this is not entirely the case. I have heard from some debt collectors that they will look to get a charging order from the courts, such that when you come to sell your property, there will be a charge for the amount of debt you owed to your creditor against your property. This would mean that if you owed £10k on loan that you defaulted on, and they got a charging order on your property, you would have to redeem this charge with the proceeds of your sale before any leftover equity was passed back to you upon completion.

This could be bad news, so it would be best to consider getting your debts settled rather than allowing this to happen. If you need help settling your debts seek professional advice from these guys.

How To Eliminate Debts » Property Market

How Will Falling Property Market Affect Those In Serious Debts?

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