Repossession proceedings - and how to deal with them (part 1 of 2)

13 June 2008

If you can’t keep up with your mortgage payments and your lender doesn’t think you’ll be able to sort out your finances in a reasonable timeframe, they may suggest you sell your property. If you don’t agree, they may feel they have to start repossession proceedings – starting with a default notice...

Default notice
A default notice is an official letter that says you’ve ‘defaulted on’ (broken the terms of) your commitment and includes details of what you owe and how quickly you’re expected to repay it. A default notice is the ‘first step’ in the proceedings: until they’ve issued one, a lender cannot take any legal action, including taking you to court.

If you receive a default notice, talk to your lender and see if you can find a way to avoid court action.

If your lender does take you to court, you should have at least 14 days’ notice of any court hearing, so talk to a legal adviser if you haven’t done so already. You should also talk to a debt adviser to see if they can suggest ways of coping with / clearing your debts.

Court
Going to court gives you a chance to explain your situation, so make sure you attend the hearing. If you don’t, the court will have to make a decision without you.

Don’t just tell the court why you’re in arrears – show them what you’re doing to pay them off, and take along a budget that shows your income and expenditure, proving how much you should be able to put towards the arrears each month. With at least 14 days’ notice, you should have time to prepare all this.

If you can show the judge you can pay back the arrears, you’ll probably be given a Suspended Possession Order. If you can’t, you’ll probably be given an Outright Possession Order.

What happens next?



Remember: it’s never too late to take action – but in general, the earlier you talk to a debt adviser, the easier (and cheaper) it’ll be to deal with your debts (and your legal problems). Apart from practical guidance on day-to-day matters like budgeting, they should be able to provide details about the various debt solutions which might help you, such as IVAs (Individual Voluntary Arrangements), debt consolidation loans / remortgages and debt management plans.

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