It’s not just homeowners and those with a mortgage that are feeling the crunch in the current economic climate! Tenants too are facing difficulties, either through circumstances that mean they can’t find enough money for the rent each month or they face the prospect of eviction because their landlords can’t pay their mortgage.
For those tenants in difficulties because they cannot meet rental payments, Guardian is currently working with letting agents to get in early with help. Often it’s the mounting burden of accumulated, unsecured debt or changes to income levels and employment that can lead tenants into a position where they could face eviction. Putting unsecured debts into a debt management programme can free up income to enable the tenant to pay the rent and avoid the possibility of losing their home.
But a Debt Management Programme is not a long term solution. It does provide some breathing space to let you start regaining control by putting household bills first (rent, gas, electricity, council tax) and offering sustainable but reduced payments to your unsecured creditors (personal loans, credit cards, HP agreements).
This can be achieved through an IVA – which is a formal agreement with your creditors that will last for 60 months. Guardian can arrange a meeting with your creditors (at which you need not be present) to discuss manageable proposals, which when agreed means that interest and debt charges are frozen. The IVA must be supervised by an Insolvency Practitioner and the agreed payment is legally binding. Upon completion of the IVA you will be considered ‘debt free’, and although you may not have actually paid off all your debts, any outstanding balances will be written off.
The Protected Trust Deed is a similar arrangement which is available for tenants north of the border. Under Scottish law, if you do qualify, you could cancel out up to 90% of your debt and pay the remainder in 36 affordable monthly instalments. It’s similar to an IVA as it must also be supervised by a licensed Insolvency Practitioner who is responsible for your negotiations with creditors and making sure you keep to the terms of the Trust Deed.
Even for tenants who have consistently kept up with rental payments, many have had to move following repossession notices. In many cases, the first a tenant knows about the situation is when they discover that the locks have been changed or there are bailiffs in their home.
The Civil Protection Rules are changing so that tenants have slightly more rights in these circumstances. Mortgage lenders intending to repossess will now have to send notice to tenants within five days of receiving notification of a court hearing date (which is often several weeks ahead) rather than being informed 14 days before the actual hearing date itself as is currently the case. Practically speaking, that should mean that tenants ought to get around three – seven week’s notice before a possession hearing. But that could all depend on what type of mortgage your landlord has. If it’s not a buy-to-let mortgage, the tenant could still not get any notice of possession at all.
One good idea is to always open mail addressed ‘To the Occupier’, as this may include notice of an approaching possession hearings. Make sure your landlord has permission from their lender to rent the property out, otherwise the lender does not have to recognise the tenancy at all. Try to find out as much as possible about your prospective landlord and their mortgage status before you take up a tenancy and if things do go pear shaped, but you were already living in the premises when the mortgage was taken out, the landlord’s lender may take you on as a tenant and allow you to pay rent to them directly.