“I don’t know what to do. The bills are piling up and I’m behind in my mortgage repayments. Today I received a letter from the bank and they are talking about taking possession of my home. I feel like I’m in a huge hole and I don’t even know where to start to dig myself out of it.”
The possibility of losing your family home, your largest asset is increasingly one of the greatest challenges facing Australians today. In fact, as times get tougher we can expect to be hearing of this happening more and more.
The most important thing to remember if you find yourself in difficulty and have been served with a Claim is to talk with your bank or financial institution as early as possible. It is crucial to remember that your bank would prefer that you continue with your loan because in doing so they stand to maximise their profit. When you sell a security over your home the bank will usually make considerably less money than they would if you were to continue making payments for the life of the loan.
“Okay, that make sense. At what point then will the bank repossess my home and how can I stop it going this far?”
Before any financial institution can commence court action they must first serve a “Notice of Default” on you requesting payment of the loan and the arrears.
A default notice gives you an additional time frame in which to make the repayments previously missed.
Upon receiving a “Notice of Default”, (if you have not done so) you should immediately submit a “Hardship Application” to your bank for variation of your loan. If your bank refuses to provide you with a hardship variation of the loan they will then commence legal proceedings against you. You have the option to apply for an external review of your hardship application (usually through the Financial Ombudsman Service).
Once legal proceedings have commenced, you should immediately engage the services of a lawyer experienced in dealing with repossession matters. Welden & Coluccio Lawyers are able to guide you through this in a discreet, timely and professional manner.
Whilst many find this situation to be not only overwhelming but embarrassing, it is vital to remember that in the event that your bank sells your home, the proceeds are rarely sufficient to cover all the arrears. In turn, it will be the responsibility of the borrowers to make up for any short fall. In simple terms, the bank may sell your house, take all the proceeds of sale and you may still be left with a personal debt to the bank.
This is one situation where ‘burying ones’ head in the sand’ is the least desirable course of action to take. It makes good sense to act early, communicate with your financial institution and contact an experienced solicitor like those at Welden & Coluccio Lawyers for expert management of what is a challenging process.