Secured Loan Debt

A secured loan can be a second mortgage or any loan secured against the value of your home or some other asset of value.

Your home can be repossessed if you fall behind with payments

If you miss payments on your second mortgage or other secured loan, your lender can take action to repossess and sell your home.

The second mortgage or other secured loan lender does not have to get permission from the lender that gave you your first or main mortgage before taking steps to repossess your home.

Your first mortgage lender takes priority if your home is repossessed. Any money from the sale of the property will be used to repay their loan first. The second lender will be paid from what is left.

National Homelessness Advice Service (NHAS)

NHAS is a partnership between Shelter and Citizens Advice, funded by the Department for Communities and Local Government.

NHAS have produced a leaflet providing step-by-step information to help those concerned about repossession. Your lender is obligated to send you a copy of this before legal action.

Secured Loans & IVAs

In an IVA, a secured loan is considered to be a priority debt. This means that while you can’t include this debt in the IVA, you are allowed make your secured loan repayments before working out how much you can afford to pay towards your unsecured debts.

Shortfalls on repossessed items
If your home or other assets have been repossessed and sold there may remain a shortfall for which you remain liable. In other words, the sale does not cover all the debts secured on it. Such debts are unsecured and can be included in an IVA or other repayment plan.[show-iva-cta]