'Serious debts' for homeowners

MONDAY, OCTOBER 16, 2006

Spiralling personal debt could mean some homeowner are dispossessed.

Homeowners could lose their homes because of mounting personal debt, the Citizens Advice Bureau has warned.

A new survey reveals that an alarming 770,000 property owners have missed their mortgage repayments over the last year owing to insurmountable debts.

The bureau has advised home owners not to take out any more unnecessary loans or credit cards and is currently calling on lenders to check that their customers have the resources to pay back their loans.

David Harker, the chief executive of Citizens Advice, says the results were expected. "These figures do not surprise us. Local Citizens Advice Bureau helped people to deal with 1.25 million debt problems last year and see many people with mortgage and rent arrears, he said.

"We are very concerned about the numbers of people who are missing payments. Missing payments on mortgages or secured loans could lead to arrears and possibly repossession. There is a clear need for more information and advice about the consequences of taking on financial commitments, particularly for younger adults."

A report conducted by the Joseph Rowntree Foundation revealed that court orders for repossession orders had doubled between 2003 and 2005 reaching a new high of 33,000. With more homeowners saddled in debt the figure is expected to increase.