Fears for Arrears as Tenants Borrow to Pay Rents

by Property118.com News Team

16:15 PM, 4th January 2012
About 9 years ago

Fears for Arrears as Tenants Borrow to Pay Rents

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Fears for Arrears as Tenants Borrow to Pay Rents

Landlords should brace themselves for a massive jump in rent arrears with the news that millions are seeking payday loans and other credit to pay rents after overspending during the festive season.

Homeless charity Shelter is warning a million homeowners and tenants are looking for payday loans that charge interest at rates of up to 4,000% APR to pay housing costs and other bills.

Millions of others are resorting to paying bills with credit cards – with 7% of credit card holders making mortgage and rent payments by card and 42% expecting to borrow on their cards to pay for food.

Shelter claims millions are facing debt to keep a roof over their heads – while landlords and letting agents claim they should pay priority bills like housing, energy and food before spending on festive treats.

Shelter chief executive Campbell Robb said: “These shocking findings show the extent to which millions of households across the country are desperately struggling to keep their home.

“Turning to short-term payday loans to help pay for the cost of housing is totally unsustainable. It can quickly lead to debts snowballing out of control and can lead to eviction or repossession and ultimately homelessness.

“Every two minutes someone in Britain faces the nightmare of losing their home. We urge every single one of these people now relying on credit to help pay their rent or mortgage to urgently seek advice.”
Consumer champion the Office of Fair Trading recently warned borrowers against taking payday loans and urged anyone with financial problems to seek debt advice.

The Post Office research revealed borrowers will be more reliant on their credit cards in January 2012 compared with 12 months ago, with 38% of cardholders planning to put at least £200 more on their account this month compared with January 2011.


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Comments

2:15 AM, 5th January 2012
About 9 years ago

The answer is to encourage tenants to obtain as many credit facilities as they can.
Tenants can avoid ever paying back if they choose.
The priority is to pay the rent and maintain your lifestyle.
It can take years by the time all your credit facilities have been exhausted.
In that time hopefully you will have recovered your circumstances and repaid the debt.
Don't worry about unsecured debt; or the other choice is vacate your tenancy.
Most  are facing short term difficulties.
As a tenant you are secure from unsecured creditors as you have no assets and attachment of earnings orders are not likely to achieve much if you are just scraping by.
So get your 0% credit card deals. max the system as much as you can to keep paying the rent unless you fancy being homeless.
I would persoanlly rather screw the banks than be homeless.
One thing if you have an asset; like a car,  put it in somebody elses name.
Then the bailiffs can't touch it.
Of course if you don't pay your credit commitments then you will end up with a damaged credit file for 6 years.
This has to be taken into serious consideration.
Another answer is to turn up on mum and dad's doorstep!?
Not many would turn their offspring away.
And it would hopefully only be a temporary way of building up finance to leave home again!
If you are out of AST contract you should have a word with M & D and then give 1 months notice and move back home.
You are unlikely to be charged the full price for staying there.
You will however have to suffer being under their rules.
A small price to pay for avoiding big debts and homelessness.


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