It’s never pleasant to think about having your home re-possessed, but if you fall behind on your mortgage payments and become in arrears of rent, it’s helpful to be aware and informed of what’s involved in the house repossession process. Here’s a guide to the stages involved in the house repossession order process in England and Wales.
Stage one – mortgage arrears
The first stage of the house repossession order process occurs when you first miss one or more mortgage payments. Your mortgage lender will get in touch with you to see what’s happened and tell you that they’re going to take action. As scary as a letter like this sounds, realistically they won’t be taking action immediately. Instead, they’ll give you a set time to work out how and when you’re going to pay what’s owed.
This gives you the chance to seek advice from a specialist organisation and find out how you could manage your debt. Your mortgage company are also on hand to discuss your options – believe it or not, they don’t want to repossess your home unless strictly necessary – and help find a solution to your money crisis. For example, you may be able to agree on a repayment plan, change your mortgage or decide to sell your house and rent instead. You could have many months of mortgage arrears before repossession.
If you can’t find a solution and are unable to pay the outstanding bills, then the house repossession process will continue.
Stage two – court action commences
Stage two involves your mortgage lender officially starting court action to repossess your home.
Mortgage companies have to follow strict rules regarding this process, so before they commence with court action they will have to supply you with full details of all your missed payments, the outstanding amount of mortgage debt you have and the total amount you owe in terms of arrears and charges.
House repossession order process stage three
At this stage in the house repossession process, you’ll begin to receive various letters and forms from the court. You should receive:
- A claim and defence form
- A notice of review
- A notice of possession hearing.
The claim form has details about the claim made against you and the mortgage payments you’ve missed.
The defence form is important as you need to fill it in and return it to the court within 14 days. You’ll need to provide information about your financial situation, such as if you’ve lost your job or had to quit due to illness.
The notice of review will tell you when your case will be reviewed by a judge – you don’t need to attend this.
The notice of possession hearing letter will tell you the date when your case will be heard. This is the important part that you do need to attend; it usually takes place about four weeks after the notice of review.
Stage four – notice of review
One of the letters you’ll receive will tell you when the judge will review your case. At this stage the judge will review all the details and decide if there needs to be a full court hearing.
You don’t have to attend the notice of review, but you may need to be available to talk on the phone and may be able to access free legal advise from a duty advisor.
Stage five – the repossession hearing
Stage five involves the repossession hearing in court – normally about four weeks after the review – and it’s really important that you attend this. Failure to do so (unless for exceedingly good reasons) will put you in a negative light and not help your case.
You’ll need to take all your paperwork to court, including a financial statement, details of your proof of income, such as pay slips or benefit receipts, and any other evidence, such as a letter from a solicitor if you’re in the process of trying to sell your house.
The court hearing is your chance to explain why your home shouldn’t be repossessed. Although the hearing won’t be long, it can be overwhelming, so it’s a good idea to prepare notes to take with you of exactly what you want to say so that you’re don’t forget anything. If you don’t have an advisor or solicitor, they’ll be a duty advisor on hand who can help you before or during the court case. For example, they can speak on your behalf if you’re not confident of doing so and will help you understand the legal jargon.
Stage six – the repossession order decision is made
When the hearing is completed, the court will make their decision. The outcome could be:
- That the repossession action is dismissed
- An adjournment to a later date, when a decision will be made
- A suspended repossession order
- An outright repossession order
If your case is dismissed, there’s unlikely to be any more court action. However, you will need to pay all legal costs and court fees.
If a case is adjourned, it can be for various reasons, such as so more information can be gathered, a property sale can go through or a financial claim can be received.
If you’re given a suspended repossession order, it means that you can stay in your house as long as you stick to a repayment plan to clear your debt. You’ll be given details by the court of exactly how much you have to pay and when. If you subsequently miss a payment, then you could be evicted.
With an outright repossession order, you will be given a date for possession, when the mortgage company will take possession of your house. You need to adhere by this and ensure that you have left the property by this date. If you don’t, you will be evicted by bailiffs.
Stage seven – eviction
If you’re still in your house after the date of possession, then you can be evicted. It’s also possible to be evicted if you have a suspended order and break the terms of it.
In order to be evicted, your mortgage lender will have to apply to the court for an eviction warrant – they will let you know when they do this.
Eviction by bailiffs will occur up to two weeks after an eviction notice has been made.
Stage eight of the house repossession order process
The final stage of the house repossession process is the sale of your home. Your mortgage lender will sell your house in order to get back the money that you owe. If there’s anything left over after all creditors have been paid, then you should receive it.
However, if the sale of your house doesn’t cover the mortgage payments you owe, then you’ll need to pay the rest. If you’re unable to pay, then more court action may be required.
As you can see, there are lots of stages involved in the house repossession order process and it can be a lengthy, stressful and unpleasant experience to go through. If you want to avoid the stress of the court process and rescue the money you owe your lender, selling your house is one viable option. Contact us today to discuss quick house sale options that avoid the need for estate agents,. Otherwise, read our How to Sell Your House Quickly article.