Can You Go To Prison For Not Paying Your Mortgage?

Woman behind bars - Can You Go To Prison For Not Paying Your Mortgage

If you are in the horrible situation where you’re having money problems and you’re behind on your mortgage payments, you may be asking; can you go to prison for not paying your mortgage.

You cannot go to prison for not paying the mortgage itself, but at any stage whilst you are having money problems you disobey an order of the court, you could be sent to prison for misconduct, but not because you’ve not paid your mortgage. If you follow all court instructions you won’t go to prison.

Can you be imprisoned for debt in the UK?

You can’t be sent to prison for not paying the debt itself, but you may be imprisoned for disobeying an order of the court if a creditor takes you to court or if you knowingly commit debt or mortgage fraud. You’d be committing mortgage fraud if you deliberately buy a property to live in with a buy to let mortgage.

It’s not illegal to live in a property with a buy to let mortgage secured on it, but if you live in your buy to let property and obtained the mortgage through deception by deliberately declaring the property as an investment property for letting, you could be committing mortgage fraud.

Can you go to jail for not paying debt USA?

You can’t be sent to jail for not paying the debt itself in the USA, as a loan default is not a criminal offence, but you could go to prison if you disobey an order of the court if a creditor takes you to court or if you knowingly commit debt or mortgage fraud.

But you have nothing to be worried about if you’re an honest person. If you end up in court, make sure you follow any instructions given by the judge, and if necessary seek legal advice.

What debts can you be sent to prison for?

Debts you could be sent to prison for, could be a debt or mortgage obtained by deception, for example by lying on a mortgage application. The fraud would have to be serious and the lender would have to press charges, but if you are an honest person it’s unlikely you’d go to prison for any debt.

What is the punishment for not paying loan?

Your punishment for not paying a loan might be the loss of assets, especially if the loan is secured debt like a mortgage, where you could lose your home. A consequence for defaulting on a loan is your resulting bad credit rating that will affect your ability to borrow, but you won’t go to prison.

Is not paying a loan a crime?

Not paying a loan is a civil offense, which means it cannot be a crime. This means you can’t be ordered a prison sentence or jail-time as it’s not a criminal offence. This is unless the loan was obtained by way of deception or by defrauding the lender.

What to do if you receive a letter threatening imprisonment from a creditor?

If you receive a letter threatening imprisonment from a creditor, you should consider making a complaint. Creditors should not threaten imprisonment, as it simply isn’t true and they cannot harass you like this. But it is unlikely you’d receive a letter of this nature from a mortgage lender.

What happens if you can no longer pay your mortgage?

If you can no longer pay your mortgage you should communicate with your mortgage company and ask them for help. If you have missed a mortgage payment it means you are in arrears and your credit report will be affected, but your lender should work with you and help you.

You should contact your lender at the earliest opportunity if you know you cannot afford your mortgage payment. You may be able to agree a repayment holiday with your lender and roll up the arrears into the original loan. You should then be able to arrange a new and affordable repayment plan with your mortgage lender.

For more information if you can’t pay your mortgage, please take a read of this article: What To Do If You Can’t Pay Your Mortgage. The article includes 10 key steps for you to follow.

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Can You Go To Prison For Not Paying Your Mortgage?

Article written by Russell Bowyer who has been investing in property since purchasing his first commercial property in the 1990's for his own Chartered Accountancy business. But his first property investment project was to turn an old dilapidated restaurant into a large 5-bed home, which he purchased for £117,500 and sold for £450,000 (to see an "after" photo of the house before it was sold see here: About). Russell owns a number of investment properties, which includes houses, flats and HMO's. More recently he has turned his creative side to investing in property using lease options. His largest lease option deal to date was to acquire 12 properties worth over £2 million for just £12, which means he paid just £1 to acquire each property!

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