You won't always lose your home if you have mortgage arrears. There are steps you can take at each stage to avoid repossession.
From 31 October lenders can start court action for repossession again.
However the Financial Conduct Authority (FCA) has told lenders they cannot ask bailiffs to evict you until after 31 January 2021.
1. Lender contacts you about mortgage arrears
Your lender will contact you if you miss a mortgage payment. They will ask you how you plan to pay back any arrears.
Get debt advice so you can understand your options.
You can take steps to deal with mortgage arrears by:
- looking at your income and outgoings
- prioritising your debts
- preparing a financial statement
You may be able to agree an affordable repayment plan with your lender.
Alternatively, you might decide that your mortgage is unaffordable and ask the lender for time to sell your home.
2. Lender starts court action
Your lender may start court action to repossess your home if you can't agree a repayment plan. This should be a last resort.
They must provide you with a list of all missed payments, the total level of arrears and the outstanding mortgage debt before they apply to court.
There are other rules the lender must follow before starting court action.
Get legal advice if your lender starts court action.
3. The court sends you paperwork
You will get several letters and forms from the court. Keep them together in a file.
This table shows the main documents you should get.
|Letters received||What this means|
|Claim and defence forms||Your lender has applied for a possession order.|
|Reactivation notice||Your lender has applied to restart the court process.|
|Notice of review||The court has scheduled a review date for your case.|
|Notice of possession hearing||The court has arranged a hearing for you to attend.|
You should check the documents carefully and complete and return the defence form.
Find out more about what to do if you get letters from the court.
4. A judge reviews the case
A judge will review your case to decide whether there needs to be a full hearing.
You don’t go to court on the review date, but you should be available to talk over the phone. You’ll get at least 3 weeks’ notice of the review.
You can get free legal advice by phone from a duty adviser on the review date. They may be able to help you reach an agreement with your lender.
5. You attend the possession hearing
A repossession hearing will be scheduled if you can’t reach an agreement with your lender and their paperwork is in order.
It's very important to attend the hearing.
If you don't turn up, the court will probably make an outright possession order and you could lose your home.
If you can’t go you should tell the court as soon as possible. For example if you’re self isolating. You may be able to attend by phone or video.
If you don't have a legal representative, you can usually get help on the day from an adviser on the county court duty scheme.
6. The court makes a decision
There are 2 types of possession order:
- an outright order
- a suspended order
An outright possession order is very serious. It sets a date for you to leave your home. This could be as soon as 4 weeks after the hearing.
Contact a Shelter adviser if the judge makes an outright possession order. You may be able to get it set aside or changed to a suspended order.
A suspended order allows you to stay in your home on the terms set by the court. You have to pay a set amount on top of your normal monthly mortgage payment.
Sometimes the lender's repossession action is dismissed or adjourned at the hearing.
Find out more about the court's decision in mortgage repossession cases.
7. When bailiffs can be asked to evict you
Your lender can ask bailiffs to carry out an eviction if the court has made:
- an outright order and the date for possession has passed
- a suspended order and you break the terms of the order
Your lender must apply for an eviction warrant from the court. They must send a notice to your home to say they've done this.
You could be evicted 14 days after this notice unless you take action.
The eviction should be delayed if you live in an area with tier 2 or 3 lockdown restrictions.
8. Sale of your home by the lender
If an eviction takes place, the mortgage lender will sell your home.
After the sale, the lender and any other secured creditors get their money and you receive anything left over.
You may have to pay off any mortgage shortfall to the lender if what you owe is more than the amount the property sells for.
Last updated 20 November 2020 | © Shelter
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