Does anyone know what the situation is legally regarding capitalised arrrears. Partner went to court a suspended possession order was granted Building society capitalised arrears after six months. Partner resumed normal mortgage payment for 8 months. then missed payment leeds and holbeck said they were reinstating arrears and asking for an eviction order. Held meeting with their debt counsellor who said the arrears were the missing mortgage payments. Does this mean they would have to apply to the court for another possession order.

-- marie slattery (marie@slattery43.fsnet.co.uk), August 08, 2000

Answers

As soon as you get into arrears, building societies generally no longer want you as a customer. Legally, however, they have to give you an opportunity to catch up if you are showing a willingness to pay off the arrears. They can capitalise them on the understanding that you won't miss another payment, but as soon as you miss another payment, you have broken this agreement, so in their eyes, they can go back to their original demand that they want their money back. This forces you to either repay the arrears in full, sell the house or re-mortgage to consolidate your debts. Either way, they won't be willing to give you another chance.

-- Mark Lance (marklance@jwmortgagesolutions.com), August 08, 2000.