What happens when you get repossessed? The 7 stages

23/12/2017
Getting repossessed is a difficult situation to be in especially as repossession proceedings are very formal and you could lose your home and have your credit score affected for many years to come. Although we run through what happens when you get repossessed in this article, the best advice is to talk to your mortgage lender at the first sign of not being able to pay for your mortgage; this could even be before you have missed a mortgage repayment.

Here are the 7 stages to the repossession process.


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    1
    Before it goes to court
Your mortgage lender must do all they can to help you so before it goes to court your Mortgage Lender must:

  • tell you how much you owe;
  • consider a request from you to change the way you pay your mortgage;
  • respond to any offer of payment you make;
  • give you reasons for turning down your offer of payment within 10 days;
  • give you a reasonable amount of time to consider any proposal they make;
  • give you 15 days’ written warning if they plan to start court action
  • tell you the date and time of a repossession hearing; and
  • let your council know within 5 days of getting notification of the date of the court hearing, in case you need to apply to the council as homeless.

Even if your mortgage lender starts a court action, you may still be able to reach agreement with them. You’ll still need to attend court to tell the judge about the agreement, unless the court tells you the hearing’s been cancelled or postponed.

What is the Mortgage Rescue Scheme

Sadly this scheme is now closed but may come back under another name. You may still be able to get advice and help about avoiding repossession by contacting organisations such as Citizens Advice and Shelter - click for the Government's full list (with links to their websites) of organisations offering advice and help against repossession

    2
    Defence form
If your lender starts a repossession action against you, as part of the repossession process the court will send you a blank defence form and guidance on how to fill it in. You can use the form to explain why you think the lender shouldn’t repossess your home.

You need to return it within 14 days.

The court will also send you:

  • copies of the claim forms for possessing your home, filled in by your lender;
  • a court hearing date; and
  • the court’s contact details.

If you haven’t got the money to pay for the legal fees, you can seek Legal Aid or free last-minute legal help under the Housing Possession Court Duty Scheme on the day of the hearing.

    3
    The hearing
Repossession hearings normally take place in a judge’s chambers, not in a court room (although it’s treated as a court). You can bring an adviser or friend to the hearing, although they must be an adult. If you don’t attend the court hearing, it’s likely the judge will give your mortgage lender the right to evict you.

You must keep to any agreement you make in court to pay off arrears. If you don’t, you may still risk losing your home.

You’ll likely be asked for proof of your finances. This can include payslips, bank statements, job offers, letters about benefits and estate agent letters (eg if you’re trying to sell your home to pay off the mortgage).

    4
    The decision
The laws governing the house repossess process mean that the lender can only repossess your home if the court grants permission. The judge could decide to:

  • adjourn (delay) the hearing;
  • set aside the case, which means no order will be made and the hearing is finished; or
  • make a repossession order

There are several other decisions such as:

Outright possession order

This gives the lender a legal right to own your home on the date given in the order and is sometimes called an ‘order for possession’. This is usually 28 days after your court hearing.

If you don’t leave your home by the date given in the order, your lender can ask the court to evict you.

Suspended possession order

This means that if you make regular payments as set out in the order, you can stay in your home.

If you don’t make the payments, your lender can ask the court to evict you.

Money order

This means that you have to pay the lender the amount set out in the order. If you don’t make these payments, court action could be taken like:

  • deducting money from your wages or bank account; and/or
  • sending bailiffs to take away things you own.

Your lender can’t use a money order to evict you from your home. If you don’t make payments set out in a money order on time, your lender could go to court again. As a result, the judge could decide to give them a possession order.

Possession order with money judgement

A money judgement is usually added to a possession order. It means you owe a specific amount of money usually made up of:

  • your mortgage arrears;
  • court fees; and
  • your mortgage lender’s legal costs.

A money judgement won’t apply if:

  • you pay your mortgage arrears and any amount set out in a suspended order; and/or
  • your lender sells your home and the sale price is more than the amount set out in the money judgment.

If you don’t pay the amount set out in the money judgement, the lender may ask the court to carry out the instructions in the possession order and the judgement.

Time order

This means that the judge changes the amount you pay on your mortgage for a set time by:

  • changing the regular amount you pay;
  • changing the interest rate on your mortgage;
  • delaying the next time you have to make a payment

If you don’t make the payments, your mortgage lender can ask the court to evict you. A time order is usually only made on some types of loan like a second mortgage.

    5
    Delaying eviction
You can ask a judge to ‘suspend the warrant for possession’. This means delaying the eviction or allowing you to stay in your home if you are able to make payments again.

A new hearing will be held but the judge won’t automatically agree to suspend the possession warrant – it depends what happens in court.

If you want to get a warrant suspended, get advice immediately.

Applying for a suspension

If you want to apply for a suspension, you should fill out an application form and either send it or deliver it to the court. You must tell the court that you need a hearing at short notice (before your eviction date). You’ll have to pay a court fee.

If you’re on benefits or low pay, you may not have to pay the fee (otherwise known as ‘fee remission’).

    6
    Appealing a judge’s decision
If you think a judge made mistakes about the law or the facts of your case in the original hearing, you may be able to appeal. Get legal advice if you want to appeal. Normally the appeal will be heard by a more senior judge.

Permission to appeal

You can ask the judge at the end of your original possession hearing if you can appeal. If the judge refuses to give permission to appeal, you can appeal to a more senior judge. If you get permission, make an application as soon as possible after your original possession hearing. You’ll have to pay a court fee.

If you are on benefits or low pay, you may not have to pay the fee.

What could happen

At the appeal, the judge can make a number of decisions including:

  • keeping the original decision
  • dismissing the previous decision or changing it
  • ordering a new hearing

The judge can also decide who pays the legal costs of the appeal.

    7
    What to do if your home is repossessed

Get help from your council

Find your local council to give you advice to help you find a new home.

Depending on your circumstances, they may also be able to provide you with emergency accommodation or a more permanent home.

Buying another property

You must tell any new mortgage lender that your previous home was repossessed. This could make getting a new mortgage hard.

If you still owe money to your previous mortgage lender, they may be able to claim some of the proceeds of your new home when you sell it.


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Buying a Repossessed Property
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