Mortgage Shortfalls

Dealing With A Mortgage Shortfall

Apply For Debt Help Now By Completing The Online Form At The Bottom Of This Page

Or View The List Of Recommended Debt Companies

What Is A Mortgage Shortfall?

Mortgage shortfalls affect a lot of people as it only takes a slight change in circumstances to make it difficult to keep up with mortgage payments. There is always the possibility that the bank can repossess your home if you fall behind, and this is a worryingly frequent occurrence. Unfortunately people tend to get in a position where they cannot afford to pay their mortgage any longer. When they stop paying on the house they risk the house being repossessed by the financial company.

Usually a finance company will try to work with you so you can afford the payments on your house. There are situations where this is often impossible for you, however. Maybe you lost your job or you became ill and could no longer work. Many things can happen that can affect your payments. When you get into this situation and your house is repossessed the finance company will sell the house. If they do not get enough money to satisfy the loan you are still liable to pay the remaining money due. This is a mortgage shortfall.

What To Do About Mortgage Shortfalls

Mortgage shortfalls can follow you for many years. The statute on the loan company collecting is 12 years, which is a long time to have something following you. They have the right in the 12 years to take you to court to collect their money. If you are taken to court, the courts can force you to make payments. They will set a payment arrangement up for you. The courts can take the money directly from your bank account or pay check.

You should always try to pay mortgage shortfalls off if you can. The finance companies should be willing to work out some sort of payment arrangement with you. Since they repossessed your home because you could not afford the payments, the financial institution will already know what kind of a predicament you are in.

Having a loan company be able to collect on a mortgage shortfall for such a long period of time is not good for you. If they happen to leave you alone for up to 12 years then they then have the right to sue you. Once the 12 years is up they have no rights anymore because the statute is up on the debt. They cannot take you to court or pursue you in any way. If they still attempt to take you to court after this period you can write to them explaining the statute is up on the shortfall. They should then drop everything. If the courts allow the dispute into their courts it should be thrown out immediately.

Things change if you pay on the mortgage shortfall in those 12 years. If there is a joint owner of the property and they make a shortfall payment, the banks have the right to take further action. It is important that you either decide to try to pay the mortgage shortfalls or do not do anything. If you can handle the shortfall hanging over your head for such a long period of time, you could choose not to pay.

Sometimes, however, you have no choice. Your financial situation may be dire and you have no other recourse but to not pay. If the bank comes after you to collect on the mortgage shortfall before the 12 years is up you will probably have to go to court. The court will look at your finances and decide what to do about payments. They may take money from your pay check to pay off the mortgage shortfalls.

The Limitation Act 1980 is what gives you the rights that you have. They say that a bank or other financial institution can only pursue you for mortgage shortfalls for 12 years. If no attention is paid to the mortgage shortfall in 12 years, the financial institution can no longer collect on it.

It is always a good idea to pay the shortfall off as soon as is possible. This is not something you want following you for such a long period of time. There are situations where you have no choice but to let it go. If you lose your job and cannot pay that is a reason for not making any payments. Otherwise you should keep up payments so as not to have something follow you for such a long period of time.

UK residents can apply for debt help now using the online form below. Alternatively, view the main debt companies page for a list of recommendations for the best debt management companies.

Apply For UK Debt Help Now

Complete This Simple Online Form For A Free Review By An Advisor From Our Recommended Debt Company, NoDebtNow
Just submit the form and an advisor will get straight back to you

Use This Form To Apply For Debt Management Plans and IVAs Only

If you have debts of LESS than £2,500 please complete our alternative Online Form instead

If you wish to consider the option of a consolidation loan, please complete the form on the Loans page

Please Only Submit If You Are A UK Resident

Please Read Our Privacy Statement