Bad Debt Remortgage
Bad debt remortgage is a term to describe just that. It is the process of remortgaging when the applicant has had bad debts.
Bad debts essentially arise as a result of the credit holder not taking positive action when in financial difficulty and winds up where they are taken to the County Court. These County Court Judgements or CCJ's, are a blot on a credit file. This is an adverse ruling by a County Court against a person who has not satisfied their debt payments with their creditors. Once the ruling has taken place it will be recorded against the persons credit history and will appear every time a credit search is done for the next seven years. If a person has a County Court Judgement against them it will have to be satisfied before they can get a mortgage. They will also find that the mortgages they can get will be at a higher interest rate. It's like losing your no claims bonus as well as paying the money back.
Depending on how bad the circumstances, it's always better to negotiate with the loan companies: they may accept a lower sum if paid in one go from say a relative or they may agree to suspend accruing interest whilst the amount is repaid.
Depending on the circumstances, there are a number of options that are available to someone in bad financial difficulty: a CCJ, an IVA or bankruptcy. If they have tried to resolve the situation but this is rejected by the lender and there is no way out a CCJ is one option. An IVA or Individual Voluntary Arrangement is a legal agreement between you and your creditors where you will come to an arrangement with people you owe money to, to make reduced payments towards the total amount of your debt in order to pay off a percentage of what you owe then generally after 5 years your debt is classed as settled. As this is a legal arrangement an IVA has to be set up by a licensed professional called an insolvency practitioner.
Bankruptcy is where a Corporation, Firm or individual who, via a court proceeding, is relieved from paying all debts once assets have been surrendered to an appointed third party designated by the court. It's a very messy business and more can be found out about this
Needless to say, every persons circumstances will be different and after a
number of years the credit file will repair itself but when it comes to trying to get a bad debt remortgage, there are going to be unresolved issues that should be addressed first. Some specialist mortgage brokers may be able to help in some circumstances here.
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