Consumer Rights Q&A: 'I'm relieved my flat may be repossessed'

Handing over your keys may seem like the easiest option, but there may be alternatives ... plus when an intern becomes an employee entitled to pay

 

Q. I have just had a letter from my lender saying that they are starting repossession proceedings against me and I will lose my flat. You may think this is strange but I'm relieved.

I haven't been keeping up the payments, the red letters have been getting more and more demanding and stressing me out and I just wish the whole thing was over. Even before they put my interest rate up recently I couldn't make the full monthly payments and pay all my other bills as well. I have remortgaged in the past and the flat is probably worth less than I owe.

Should I just give them the keys and walk away? I will have to live with my parents which I don't want to do and I'm worried that I'll never get another mortgage but I can't think of another way out. Would handing the keys back without being taken to court help me in future?

SK, Manchester

 

A. Is the situation really that bad? Repossessions are rising as more people find themselves in your situation, but just because your lender is taking legal action doesn't mean you will definitely lose your home. Things may seem dire but may not be so bad that they can't be saved.

I'm guessing that you've been so stressed by those red letters that you haven't replied to them or tried to come up with an arrangement to clear your arrears.

The lender has to keep you informed about your payments, arrears and any action they are taking. They have to warn you you're in danger of losing your home. But the last thing most lenders want is to repossess. They would rather you paid up so that they don't have to go to the trouble of getting you out and selling your home.

However, if you don't pay up and you don't contact them they have little choice but to send letters and eventually take legal action. Ultimately that means they arrange a repossession hearing in court. But there may still be time to work out a suitable payment plan to help you clear your arrears.

If you can come up with a plan and the lender agrees to it the hearing may not go ahead. Many lenders will say they expect you to clear the arrears over six months or a year. That may be impossible if you are struggling to make the original monthly payment. If the lender won't agree to you clearing the arrears over a longer period it could be to your advantage to go to court.

Appearing in court to defend a repossession order can be a nerve-wracking experience but don't be tempted to miss the hearing. Should your case get as far as court, and you have a proposal as to how to clear your arrears over a longer period, the judge may be more sympathetic than the lender and could grant a repossession order but suspend it to give you the chance to pay. You may even be given the whole of your remaining mortgage term over which to clear your arrears.

You don't say whether you're working or why you've got so far behind with the mortgage.

Are you in arrears with other bills? Have you lost your job? If you are keeping up other payments, such as credit card bills, you need to think about cutting down on those payments to leave you enough money with which to pay the priority bills such as the mortgage. You can even make token payments to your unsecured creditors in the short term to get the mortgage on track.

Take a long hard look at your finances and get help to work out a realistic budget. Agencies such as Citizens Advice Bureau, CCCS and National Debtline can help. You'll find them through any search engine or listed in your phone book.

However, if you can't come up with a workable plan and are unable to make the regular payments, moving out may be your only choice. Simply handing back the keys won't clear your arrears. If the amount of money made from the sale of the flat isn't enough to cover the outstanding amount on the loan you will still owe the lender the difference.

You might get a better price for your flat if you sell it yourself. Call the lender, tell them you are taking advice and ask for time to sort yourself out. It just might pay off.

Q.  My son has been working for a firm of landscape gardeners since he left school last summer. He was laid off for quite a while over the winter but started back in the spring. He is getting experience but I think he's being exploited.

He's called an intern and they only pay his expenses. Surely there are rules about how long you can call someone an intern and expect them to work unpaid? He works extremely hard, is learning a lot and now knows how to manage his time and get the job done. He loves the work but is exhausted by the time he gets home at night so it's hard to look for paid work. I don't know how to advise him as I appreciate there are probably lots of others who would step into his shoes if he kicked up a fuss and got fired. Can you give me some advice please?

GH, Leicestershire

 

A. Unless he really is a volunteer, your son is probably entitled to be paid the national minimum wage (NMW). For 16 and 17-year-olds that's £3.68 an hour; at 18 it's £4.98 an hour. If there is a contract of employment or other arrangement which makes him a "worker" he is entitled to be paid. It can be a problem deciding who is a worker and who isn't, but calling someone an "unpaid worker", "intern" or a "volunteer" isn't enough to prevent them from qualifying for the NMW.

The law says an employer can't force or persuade a worker who is entitled to the NMW to agree to work for less. Nor can your son sign away his right to the money. If your son claims he is a worker and is therefore entitled to be paid, the onus is on the person he considers to be his boss to prove that he isn't.

www.moneyagonyaunt.com

Arts and Entertainment
Characters in the new series are based on real people, say its creators, unlike Arya and Clegane the Dog in ‘Game of Thrones’
tv'The Last Kingdom' embraces politics, religion, warfare, courage, love and loyalty, say creators
Sport
Sergio Romero saves Wesley Sneijder's penalty
world cup 2014But after defeating the Dutch, Lionel Messi and Argentina will walk out at the Maracana on Sunday as underdogs against Germany
Sport
Scoreboard at the end of the semi-final World Cup match between Brazil and Germany at The Mineirao Stadium in Belo Horizonte
Sport
'Saddest man in Brazil' takes defeat with good grace, handing replica trophy to German fans
PROMOTED VIDEO
News
peopleThe Game of Thrones author said speculation about his health and death was 'offensive'
Arts and Entertainment
Martin Freeman and Lauren O'Neil in Jamie Lloyd's Richard III
theatreReview: The monarch's malign magnetism and diabolic effrontery aren’t felt
News
Glamour magazine hosts a yoga class with Yogalosophy author Mandy Ingber on June 10, 2013 in New York City.
newsFather Padraig O'Baoill said the exercise was 'unsavoury' in a weekly parish newsletter
Extras
indybest
News
people'She is unstoppable', says Jean Paul Gaultier at Paris show
Sport
Alexis Sanchez and apparently his barber Carlos Moles in Barcelona today
football
Arts and Entertainment
Miley Cyrus has her magic LSD brain stolen in this crazy video produced with The Flaming Lips
video
Arts and Entertainment
In his own words: Oscar Wilde in 1882
theatreNew play by the Oscar Wilde's grandson reveals what the Irish wit said at his trials - and what they reveal about the man
News
people
Arts and Entertainment
Unless films such as Guardians of the Galaxy, pictured, can buck the trend, this summer could be the first in 13 years that not a single Hollywood blockbuster takes $300m
filmWith US films earning record-breaking amounts at the Chinese box office, Hollywood is more than happy to take its lead from its new-found Asian audience
News
The garage was up for sale in Canning Place Mews for £500,000
newsGarage for sale for £500,000
Life and Style
tech
Finacial products from our partners
Property search
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Associate CXL Consultant

    £40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

    Associate CXL Consultant

    £40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

    Financial Planning Manager, Qual Accountant, £380

    £300 - £380 per day: Orgtel: Financial Planning Manager, Banking , London, £30...

    Business Analyst - Financial Services, Trading Systems, Agile

    £60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: A leading fina...

    Day In a Page

    The true Gaza back-story that the Israelis aren’t telling this week

    The true Gaza back-story that the Israelis aren’t telling this week

    A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
    A History of the First World War in 100 Moments: The German people demand an end to the fighting

    A History of the First World War in 100 Moments

    The German people demand an end to the fighting
    New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

    New play reveals what Oscar Wilde said at trials

    For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
    Can scientists save the world's sea life from

    Can scientists save our sea life?

    By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
    Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

    Richard III review

    Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
    Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

    Hollywood targets Asian audiences

    The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
    Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

    Grindr founder Joel Simkhai: 'I've found love on my dating app'

    Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
    Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

    Is it time to ditch autocorrect?

    Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
    10 best girls' summer dresses

    Frock chick: 10 best girls' summer dresses

    Get them ready for the holidays with these cool and pretty options 
    Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

    Westminster’s dark secret

    Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
    A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

    A History of the First World War in 100 Moments

    Dulce et decorum est: a life cut short for a poet whose work achieved immortality
    Google tells popular music website to censor album cover art in 'sexually explicit content' ban

    Naked censorship?

    The strange case of Google, the music website and the nudity take-down requests
    Howzat! 8 best cricket bats

    Howzat! 8 best cricket bats

    As England take on India at Trent Bridge, here is our pick of the high-performing bats to help you up your run-count this summer 
    Brazil vs Germany World Cup 2014 comment: David Luiz falls from leader figure to symbol of national humiliation

    David Luiz falls from leader figure to symbol of national humiliation

    Captain appears to give up as shocking 7-1 World Cup semi-final defeat threatens ramifications in Brazil