The repossession of a property goes through a number of stages and there is action you can take to prevent it moving onto the next stage.

1. Your mortgage/loan lender will write to you about your arrears.
Lenders have to follow certain rules in how they deal with you.
When you start missing your mortgage/loan payments, the lender needs to contact you to discuss repaying the arrears.
If no resolution is agreed, the lender should write to you again warning that they will apply to the court for a repossession order if you do not reply or are not satisfied with your response.

2. Your mortgage/loan lender will apply to the court for a repossession order.
Before repossessing your property, your lender must get a court order.
The lender will make an application to your local county detailing why the judge should give them a possession order and possession of your property.

3. The county court writes to you informing you of a hearing date/time
The court will set a date for a hearing where a judge will decide if your mortgage/loan lender should take possession of your property.
The court will write to you confirming the date & time of the hearing with:
+ a copy of the lender’s claim form
+ why your lender wants to repossess your property
+ a defence form for you to return to the court

4. The repossession hearing
This is where the county court judge makes a decision about your repossession.
The judge will read and hear the evidence form your lender and yourself before making a decision.
The judge may:
+ decide that your lender should be allowed to repossess your property to repay your debts and you can be evicted
+ make a suspended order for possession and allow you to stay in the property so long as you adhere to court conditions
+ adjourn the hearing to a later date allowing you and/or the lender to take further action(s) before the case is reheard
+ dismiss the case against you altogether

5. The lender is awarded a repossession order
If the judge decides that your property should be repossessed, a repossession order is granted to your lender.
The order will detail when you leave the property which is normally 28 days but 56 days is allowed in certain circumstances.
If the judge feels that you should have another chance to keep your property, a suspended repossession order may be granted but with conditions (such as maintaining your future payments along with an agreed amount each month towards your arrears).

Your lender must adhere to pre-action protocol rules before taking you to court to repossess your property.

The lender must treat you fairly and consider any reasonable suggestions by you to clear your arrears.

Your lender must provide you with:
+ history of your payments over the last 2 years
+ your monthly due payments
+ details of your arrears
+ your mortgage balance along with any redemption penalties
+ interest and any charges that will be added

This must be provided in a clear and understanding way, but if any aspect of this is unclear, you must contact your lender to clarify.

You will get at least 21 days’ notice of a repossession hearing date.

On the front of the claim form sent by the court will be the date and time of your hearing, you should allow the whole day for this.

The claim form will also include the particulars of the claim and a defence form for you to complete and return to the court.

If you intend to provide a defence, then this should be done as soon as possible.

The defence form should be used to tell the court about:
+ your money and finance problems
+ any offer you can make to repay your arrears
+ if there are any discrepancies to the lenders claim
+ provide supporting documents

You should detail anything that you think the judge would need to know, such as why you missed payments.

The particulars of the claim and your defence forms are read by the judge before the hearing.

Most importantly you will need to provide a credible solution to your situation.

If you intend to return to your payments each month and contribute to your arrears, then you will need to provide a budget statement and evidence that the circumstance that caused the arrears has now passed.

If you intend to sell your property yourself on the open market, it is unlikely that you will not be allowed this time, particularly if you have already proposed this to your lender during pre-action and you have failed to sell the property before the hearing.

The court will more than likely adjourn your case if you provide evidence that you:
+ have an offer of purchase from an estate agent
+ have an offer to purchase from a quick-sale company
+ have a refinance offer from a short term lender to completely repay your current lender

Mortgage/loan repossession hearings normally take place at your local county court.

This may be within the judge’s private chambers but normally the hearings take place in a court room.

You have more chance of winning your case and saving your property if you attend court rather than merely relying on a postal defence.

When you arrive, tell the court staff that are you there to attend the hearing (take all your paperwork with you) and ask to see the duty officer if you haven’t taken an adviser or solicitor to speak on your behalf.

The duty officer/adviser/solicitor may be able to give some last minute advice, this service comes under the court duty scheme and is free.

They will be able to:
+ give last minute advice
+ negotiate with your lender’s representative for an out of court agreement
+ represent you in the hearing

In the hearing:
+ the lender’s solicitor will explain what order the lender wants the court to make
+ you or your representative will be allowed to ask the lender or their representative questions
+ you or your representative will address the court with your arguments and propose solution alternative to a repossession
+ the judge may ask you or your lender a number of questions
+ the judge will make a decision based on the law and on the evidence presented

The court doesn’t have to order the repossession of your property.

You can ask the court to suspend a repossession order, adjourn the case to a later date or to dismiss your case.

Suspend a repossession order
The court may suspend a possession order on the condition that you keep to an agreement to clear your arrears or that you are in the process of selling your property.

Adjourn your case
The court may adjourn your case allowing you more time to look into solutions such as quickly selling your property or refinancing whereby your lender debt will be repaid entirely, adjournments are often given for 28 days, but sometimes as long as 56 days.

Dismiss your case
Your case may be dismissed if:
+ you have paid off your mortgage/loan arrears
+ your lender cannot give a show a reason for repossessing your property

You will normally have to pay the lender’s legal costs which can be added to your mortgage balance, however if your lender has acted unreasonably bring you to court, you should ask the court the lender pays their own costs.

PRESENTING YOUR CASE

Explain why you have fallen into arrears.

Have copies of correspondence to and from your mortgage lender and copies of any evidence submitted to the court with your reply defence.
Take any additional supporting evidence you may have for your arrears such as:
+ medical certificates if you were ill or had an accident
+ letters from your doctor or hospital showing why you were not in work
+ evidence of redundancy or reduced hours from your employer
+ evidence that any of your benefits have changed

Show the court what action you have taken

The judge will want to see that you have kept open communications with your lender and have tried to negotiate a solution.

If you have kept records of letters, emails and calls, take this evidence with you to court, this will contribute to enlightening the judge all your pre-action efforts.

If you have already made steps to sell or refinance your property, take evidence of this, it will allow the judge more reasons to postpone a repossession order or adjourn your case to a later date.

Present to the court a solution dealing with your arrears

If you are now able to maintain your mortgage/loan payments and make a contribution to your arrears, you will need to show how your circumstances have now improved such as:
+ got a new job
+ your reduced hours of work are back to normal
+ a family or friend loan money to clear your arrears
+ you have inherited money or property
+ you have improved your finances by taking in a lodger or you have given up running a car
+ you have taken steps to refinance your mortgage/loan with an alternative lender
+ your property will be sold

REFINANCING

If you can take an offer of refinance from an alternative lender, the court will likely either adjourn your case or postpone the repossession to allow you time to complete on your refinance

SELL YOUR HOME

If you have decided to sell your property to pay back mortgage/loan secured against it, the court could postpone the case or suspend the repossession order.

You will however need to take evidence that you have had the property valued to demonstrate that this would be sufficient to pay back you mortgage/loan lender.

The degree of difference between how much your property is worth and how much you owe is known as the equity.

The more equity that is in your property in proportion to how much you owe the lender means that the risk to your lender of a delay is reduced and the could is more likely to hold in your favour.

If you don’t have much equity in your property, there is a greater risk to the lender that if arrears are allowed to build up through further delays, then the court will likely hold in favour of the lender.

If the court decides to allow your lender to repossess, you can ask for a delay if you feel that you may have difficulties to find somewhere else to live.

The court is allowed to delay eviction to a maximum of 56 days.

Outright possession order

This means that the court has decided to allow your mortgage/loan lender to repossess your property.

This is usually 28 days after the hearing but if you are in a difficult situation with young children for example, they may extend this to 56 days.

If you don’t vacate the property, the lender can apply to the court for bailiffs to evict you.

Even though the court has awarded the lender with a repossession order, it is still possible to negotiate a complete solution with your lender, even once evicted this is possible but it would be at your lender’s discretion.

Suspended possession order

This is a little like a suspended sentence, the possession order has been given to the lender but is suspended as long as you keep to the conditions set by the judge at the hearing.

The judge may decide to let you stay if you:
+ keep up with your monthly payments plus an agreed amount off the arrears
+ make an agreed lump payment by a certain date

The judge may suspend a repossession order to allow you time for you to sell your home.

If however you fail to honour the terms set out by the court, your lender can apply to the court to send the bailiffs to evict you.

Order to adjourn the case

An adjournment is when the judge feels the case cannot be decided at the first hearing and it is postponed to another date.

Reasons for an adjournment include:
+ the court needs more information from you or your lender before making a decision
+ the court believes that you are able to raise the funds to clear the arrears and need a little more time
+ you are selling your property, have an offer and need more time to complete the sale
+ you have an offer of refinance but need more time to complete
+ your lender has failed to adhere to the pre-action protocol rules

The court will likely set conditions that must be met while the case is adjourned.

Order to dismiss the case

The court may decide to dismiss the case.

If the case is dismissed, your lenders claim is ended and cannot repossess your property.

Reasons for dismissing a case can include:
+ the correct procedure for bringing the case to the court was not followed by your lender
+ you cleared the arrears by the date of the hearing
+ your lender or representative for them attended the court hearing

If your case is dismissed, your lender will have to restart the repossession process from the beginning.

After repossession your lender will sell your property to pay off your mortgage/loan.
Unfortunately the sale price might not clear your debt(s).

The lender has the choice to put the property on the open market or simply sell it at an auction.

The money from the sale will be used to clear your mortgage including any interest, the lender’s legal costs, the sale costs, any bills and maintenance costs and any other debts secured against the property.

Typically the UK average for repossessed property sale is 65% of the value of the property.

If the sale price doesn’t cover your debts, interest and costs, the lender(s) can take steps to recover this amount still owing, or simply sell your debt to another recovery company.

Unfortunately once your property has been repossessed and sold, your problems may not be over.