Know the difference between repossession and voluntary surrender
What is repossession?
When you miss mortgage repayments for some time your lender will apply to the court to take possession of your property. If they are successful, the property is sold and proceeds of the sale are offset against the outstanding balance owed. However, you may still owe the lender money for any shortfall (as well as owing other creditors) so you should explore all alternatives to repossession first.
What is voluntary surrender?
Voluntary surrender is when you transfer ownership of your home to your lender for them to sell. Do not voluntarily surrender your home without seeking professional advice first. If your house is sold for less than the amount you owe, you will still owe your lender the balance.
It’s important to note that any borrower in fear of losing their home should make themselves familiar with the legislative protections available to them. Under the Land and Conveyancing Reform Law 2013, for example, the court can postpone repossession proceedings for up to two months, to allow the borrower to explore the possibility of putting in place a PIA.
A PIA, or Personal Insolvency Arrangement, is a court-approved agreement between you and your creditor. It allows for the restructuring and write-off of debt, with the aim of keeping you in your home where possible. You can access the services of a Personal Insolvency Practitioner (PIP) for free via the Abhaile scheme here.
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