What happens if even this is not enough?
If they are not happy with your response, your lender will write to you asking you to pay back the arrears. If you are unable to do so it can then take out a court order against you.
Recently (Nov 2008) Mortgage Lenders have agreed to hold off requesting repossession orders for at least 3 months although some banks who are at least significantly owned by the government (including RBS and Northern Rock) have agreed to extend this period to 6 months.
Also in the 2008 Pre Budget Report the government has announced an initiative to try and help vulnerable people avoid repossession under the Mortgage Rescue Scheme scheme. However this is only intended to help;-
- Pregnant women
- People with Dependent children
- Vulnerable people such as the elderly or who have a mental illness or is handicapped
Even then, you would only potentially qualify if the equity in your property is enough to cover your priority debts and living in the property would be sustainable once the scheme had been applied . Also you must agree to some other debt solutions and trading down must not be practical. For more information click here.
If these do not apply to you it will not be able to help and after the agreed period the lender will still probably pursue a Possession Order. If so you will be asked to attend a court hearing where a judge will consider the claim against you and any offers you have made to deal with the arrears.
What will happen at the hearing
The judge will hear evidence from you and your lender or freeholder before making a decision. The judge may:
- adjourn the case to wait for further evidence or to give you more time to find a solution.
- strike it out
- allow you to stay in the property provided you keep to certain conditions, such as repaying the arrears in instalments, or
- give you time to sell your property to avoid repossession, or
- decide that you should be evicted, in which case they will grant a possession order against you.
Possession orders are usually only made in the most extreme and hopeless cases, where a borrower has made absolutely no effort to remedy this grave situation. In most cases judges will assess the financial position and suggest an amount which could be paid to the lender each month. Provided that you stick to that agreement, the court is unlikely to grant an order of possession against you.
Even if they do it may still be possible to avoid you loosing your home. Repossession proceedings can be abandoned even after an order has been granted if a payment plan is agreed.
Even if you have attended court and have already handed over the keys to your home, as long as the property has not yet been sold then it is not too late to stop your repossession! Via our firm of debt management specialists we may also be able to either offer the chance of setting up an Individual voluntary Arrangement IVA to reduce your monthly expenditure on other debts to enable you to pay the mortgage.
So if you have been threatened with a repossession court order don’t delay, complete our enquiry form to the right on this page or call us on FREEPHONE 0800 970 4882 and we will do our best to help you.
If the judge decides that your home needs to be repossessed, the court order will state a date by which you must leave. If you have not left by that date, your lender or freeholder must apply to the court for a bailiffs warrant. The bailiffs will write to tell you when the eviction is to take place, and when they come, they can remove you from your home.
Couldn’t we just hand our keys back?
No – Lenders can still take action against you to recover any losses. Even if you had paid at the time of taking out the mortgage for an Insurance policy to cover against such an eventuality – quite often referred to as Mortgage Indemnity Policy or Guarantee, it only covers the lender not you, they can still ask you for any shortfall.
