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Government extends debt advice help for homeowners

These services have proved their worth: 36,000 cases have been seen by the court desks over the past year, and more than 100,000 households have benefited from free advice on managing their debts from charities and councils.

Services offering free advice and representation in court have helped stop repossession in four out of five cases making use of their service, supported by extra Government funding to ensure help is available in county courts across England.

The decision comes as pressures on repossessions are forecast to continue throughout 2010. The Government said it had decided to act ahead of the repossession risk next year by extending the help available.

This is part of the comprehensive range of support that the Government has put in place, including help with mortgage interest payments and special Government schemes for the most vulnerable households.

Over the last year, more than 330,000 homeowners have received help and advice with their mortgages.

Housing Minister John Healey said: "More than 330,000 homeowners have benefited from a comprehensive range of Government help and support over the past year, and repossessions are running at half the rate of the last recession. But with the risk of repossession set to remain high throughout next year, I want to ensure we are doing everything possible to help.

"The people who work in debt advice agencies are, in many respects, the unsung heroes of our campaign to help people avoid repossession.  Whether over the phone, face to face or in court desks across the country, the service they provide is a vital lifeline for those who feel that repossession is just around the corner. So I’m extending this free help into next year with £4million additional Government funding.

"And to ensure lenders follow the tough rules put in place, a new checklist was introduced earlier this year so lenders must prove they have exhausted every possible option before seeking court action.

"But I also remain concerned that a disproportionate number of repossession cases come from specialist lenders. That is why it’s vital that the FSA’s tougher regulations for lenders are introduced as quickly as possible – to ensure all borrowers are treated with the same tolerance and understanding, regardless of who their lender is. These measures combined will ensure that in all cases, repossession remains the last resort."

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