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Shelter’s Specialist Debt Advice Service: Housing Debt Advice & What’s New for 2020

Posted by Natalie Pearson 07/01/20

Alexa Walker is a Debt Specialist & Senior Legal Writer at Shelter

As usual we’ve had a quiet Christmas period on the Specialist Debt Advice Service consultancy line. This hasn’t meant putting our feet up – we’ve been using the time for writing our monthly e-bulletin and recording a webinar to help keep advisers abreast of new case law and legislation. I’ve been writing articles for Quarterly Account and Housing Matters about charging orders, bankruptcy and property ownership as those issues come up again and again in debt advice, and with consumer debt rising to a record £15k per household in the UK we don’t expect that to change any time soon.

Gearing up for mortgage possession

We’ve concentrated our latest webinar efforts on challenging consumer credit agreements where the lender hasn’t sent the right notices and statements. The law in this area can be tricky, so we’ve made it as clear as possible and designed a resource with guides to the law, complaint letters and even court documents so that dealing with those cases is as painless as possible for advisers. One of the exciting things about working on this area is that the law applies to a lot of the subprime second mortgages that were entered into before 2016, and we’ve achieved some great successes for borrowers in arrears – read our success story here for details of how we helped one family avoid eviction and write off £65k of arrears. At a time when mortgage possession claims are up 42% on this period last year we are especially keen to help advisers get informed and up-to-date about all the defences that are available to borrowers.

Time orders

It’s been time to revisit the home ownership pages on Shelter Legal, ensuring the information is as accurate and up-to-date as users of the site require it to be. This has involved getting stuck into the changes to the time order provisions in the Consumer Credit Act, which many people don’t realise now apply to all mortgages, not just second mortgages. This change in the law could provide relief for all the borrowers reaching the end of their mortgage terms with an outstanding balance, where the traditional powers of the court to suspend possession are extremely limited. We’re working on a couple of cases where a time order could be an option so watch this space for our future successes!

Guarantors

The rise in guarantee lending has been a noticeable trend in the last 10 years. We’ve been sharing our knowledge with advisers across the country, producing a webinar and guide to guarantor agreements and helping advisers take guarantor cases to the Financial Ombudsman, who are currently upholding large numbers of complaints about guarantor lenders. Often the right affordability checks aren’t carried out or the guarantor doesn’t really understand what they are getting into. Some of the work we’ve done on guarantors applies to tenancy agreements too, so get in touch if you need a second opinion, contact details below.

What we expect to see in 2020

As well as the increase in consumer debt, we’ve seen a major increase in people looking for help with debts to government agencies and local authorities such as benefit overpayments and council tax. This, along with people struggling with utility debt, suggests people aren’t managing day-to-day. Fortunately Debt Relief Orders include all those types of debt, and debtors are definitely taking advantage of the low cost insolvency option – the Insolvency Service has granted more than a quarter of a million orders since they were introduced in 2009. On the back of the success of DROs and the Scottish Debt Arrangement Scheme, the government is due to introduce Breathing
Space, a 60-day break during which interest is frozen and enforcement prohibited. This will be implemented along with a statutory debt repayment plan for those accessing debt advice. We will spend the next 12 months getting to grips with the new schemes so we are ready to support and inform advisers as soon as they are implemented in early 2021.

The Specialist Debt Advice Service offers free professional guidance for anyone providing free advice in England and Wales. Call us on 0330 058 0404 or use our webform. Our webinars and online resources are available to advisers on the Institute of Money Advisers website. Register for free on the Networking and Information Sharing section of the site.

By Alexa Walker, Debt Specialist & Senior Legal Writer at Shelter.

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