Legal aid schemes to deal with increasing repossessions

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by Kay Murchie

The credit crunch has meant that consumers‘ finances are being stretched to their limit with rising mortgage payments and higher food and fuel costs.

As a result, repossessions are on the rise and according to figures from the Council of Mortgage Lenders (CML), there were 27,100 repossessions last year.

However, the CML recently warned that repossessions would increase by 50% to 45,000 during 2008.

As a result of rising repossessions, the Financial Services Authority (FSA) is warning that mortgage firms should treat customers fairly and said a flexible approach was needed from lenders when recovering arrears.

Legal Aid schemes are to be expanded in British courts in a bid to deal with rising repossessions.

The Legal Services Commission (LSC), the Government body that administers Legal Aid, has confirmed that an additional 20 emergency Legal Aid schemes are to be set up at county courts.

The free legal scheme could be the difference between people keeping and losing their homes.

The LSC funds emergency schemes so homeowners at risk of repossession can receive free legal advice and representation on the day of the hearing, not matter what their current financial circumstances are.

Carolyn Regan, LSC’s chief executive, said the rise in repossessions is the reason why we are taking the necessary action and implementing these emergency court schemes.

Losing a home has a devastating affect on families but so many of them turn up at court without legal help, added Ms Regan. Approximately 174 courts now have Housing Possession Court Duty Schemes.

Housing Minister, Caroline Flint, points out that the rate of repossessions is not on the same scale as the early 1990s, however, we still want to ensure that the right support is available for those who need it.

The scheme first ran in 2005, when 12,000 cases were undertaken. By 2006-07 the figure had more than doubled to around 30,000. The latest expansion means even more people will have access to the service over the next 12 months.

Homeowners in danger of being evicted can call the Community Legal Advice helpline on 0845 345 4 345.