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Edinburgh: "bankruptcies Soar To 10 A Week"

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According to an uncharacteristically downbeat article in the Evening News (http://edinburghnews.scotsman.com/edinburg...m?id=1372702007),

THE number of people declared bankrupt in Edinburgh has soared to almost ten a week, as rising interest rates start to bite.

Debt management experts today warned the problem will worsen as homeowners come to the end of fixed-rate mortgages and house prices stabilise.

"Stabilise": now there's a good word. Maybe it's like the way a rollercoaster stabilises at the top of the slope, just before it starts to go downhill.

They also say

Until recently, spiralling house prices - particularly in Edinburgh - have allowed thousands of homeowners to release equity in their property to pay off other debts. At the same time, banks and building societies have been handing out massive mortgages to buyers.

But many home owners are now being hit by rising interest rate levels, currently at 5.75 per cent following five hikes over the past year, while a levelling-off of house prices makes it harder for owners to release enough money to cover their debts.

Oh dear, oh dear, oh dear. Is it conceivable that this is only the beginning and there's a lot more to come?

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How do houses get repossessed in Scotland? Is there a public auction?

That's a good question, but I don't know the answer - I've never been repossessed. I don't think that there have ever been huge numbers of repossessions in Scotland before, mainly because we've managed to avoid previous house price bubbles which have been concentrated in Southern England. Most of the Google hits I could find consist of information about the legal processes preceding repossession, but I couldn't find much about what happens to houses once they've actually been repossessed apart from an article from the Times where someone says “Typically a lender with a repossessed property will run a three- or four-week conventional campaign before sending it to auction.” It also appears that in England and Wales a lender can pursue someone for their debts for up to 12 years, but in Scotland the debt lapses after 5 years. (Edit: got that wrong the first time).

Edited by Scunnered

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