REPOSSESSION: How it works and how to avoid it
This section covers:
Securing a Loan
If you have ever borrowed money, one of the cheapest ways to do it is to secure it on your home. If you take out a mortgage, then the loan is secured on your home. If you take out a Secured Loan - the loan is secured on your home.
This is a great way to borrow money, until you find it difficult to make the repayments. The rest of this article talks about mortgages, but the same is true for any loan secured against your home.
Mortgage Arrears
If you have arrears on your mortgage, your mortgage lender will send you letters asking you to repay the arrears. They will charge you for each letter they send, and they will add that charge to your outstanding debt.
If you can start paying the mortgage again, you should reply to their letter with a proposal, perhaps that you will pay the monthly mortgage interest, plus £50 per month towards the arrears. Many lenders will accept this proposal.
After a period of time and a number of letters, if you do not repay the arrears, the mortgage lender will apply to the courts for possession of your property.
Each lender has different criteria for when they will apply to the courts. Some do it after two months; others will wait for six months or more.
Possession Order
When the lender has applied to the court for possession, they will send you a letter informing you when the court hearing will take place.
You should attend the court hearing, explain to the judge the difficulties you have been having, and make a proposal on how you will pay off the arrears. If you have a fair proposal, with evidence on how circumstances have improved for you (e.g. a letter from a new employer), then the judge will normally suspend the repossession order, and allow you to follow your proposal.
Notice of Eviction (form N54)
If you do not keep up with your repayment schedule, the lender can apply to the courts for an Eviction Order.
Again, you should attend this hearing, and explain to the judge why you have not been able to keep up the repayments.
If there has been a change in circumstances, and the judge feels that you will now be able to meet the repayments, he may give you a second chance. However, if he feels you will not be able to meet your repayment obligations, he will issue a Notice of Eviction (form N54). Here is an example.
This is a letter, written by the Court, informing you of the date and time that the eviction will take place. You will normally be given about two weeks notice to arrange alternative accommodation and to remove your belongings.
Your Options
At this point, you need to act very quickly, as the only way to avoid this repossession is to prove that you can pay off your debts.
You may be able to get a remortgage if there is sufficient equity in your property and you have a regular income, however the arrears you have built up would make you a high risk customer.
Another alternative is to sell your house quickly. The money raised by doing this should pay off your debts. You need to find a buyer within 2 weeks. This is where Fresh Start Home Buyers may be able to help. Check out the menu options on this page, and see which of our options would best suit you.
If you would like any further information on the Repossession Process, and what you can do to avoid it, please call Chris on 01425 470558.
If you are due to be evicted within the next 24 hours, we may still be able to help. Please call Chris on 07956 327327 immediately.