Property Repossession Process Explained

Remember one thing: lenders or courts do not want to repossess your house. Lenders do not like to be seen in bad light and courts have a duty to look after the interests of ordinary citizens. However courts must also protect the rights of lenders. Therefore they expect you to keep your side of the promise: if you borrow money to buy a house then you must repay the loan in full with interest.

But here is one crucial point to remember: if you do not keep up with your mortgage payments then eventually your property will be repossessed by the lender. If you get in any difficulty in repayments then you should seek advice without delay to stop repossession.

Many agencies that will help you provide advice on debt management, legal aspects and other areas. Citizen Advice Bureau or non-profit making credit counselling agencies can be a good start. However most of these agencies rely on the help of volunteers to advice people. These volunteers often do not offer specialist advice. Depending on your circumstances, professional or specialist advice should not be discounted by any means.

Having said that, house repossession and your eviction are the last resort for the courts. This is how the repossession process works:

Lender’s Letters
Lender will almost certainly let you know by a letter that your payments are behind schedule. It will usually ask you to either bring the arrears up to date or contact the lender to discuss your situation. If they do not hear from you within specified time then they will write you again. Failing that they will instruct their solicitors.

Lender's Solicitor
Lender’s solicitors will generally give you a few days (usually 7-14 days) to pay off your arrears before starting proceedings. The proceedings are generally court action.
Remember, courts are likely to be sympathetic towards you if you have made an effort to pay off the debt or address the problem. So it is crucial that you contact some one who could advice you at this stage, or even buy the property off you so that you can pay off the debt.

Property Possession Order
Often it is possible to negotiate a repayment plan. Remember what I mentioned above: lenders or courts do not want to go down the route of evicting you from your property. Many lenders are more sympathetic than others and even open to suggestions on how the loan can be paid back. It may even mean that the payments are reduced for the time being till your situation changes. If you are honest with them at earlier stages then this will help establish a trust between two parties.

But if you carry on ignoring letters or other communication then eventually you will be served with a county court claim (called Order for Possession). This can happen as soon as within six months of the first missed payment.

This order is a confirmation that legal proceedings to repossess your home have begun. Your lender will notify to the judge during subsequent hearings that your arrears constitute a breach of contract between you and the lender. Since the lender is entitled to recover his money, he will ask the judge’s permission to repossess the property.

If the judge agrees, lender will be granted possession of the property. Bailiffs will be instructed to evict you from the house at a pre-determined date. In due course the lender will sell the house to recover his money.

Important: Please note that if lender is unable to recover all its money (including expenses e.g. legal and admin costs, bailiff costs etc) then you will still remain personally liable to the lender for the subsequent claims.

So it is best to be proactive and seek advice and help. Your aim should be to keep the house. If all fails then try not to get to the stage where house is repossessed. Sell it your self and pay back the loan. That way you will be able to protect your credit reputation and record for future. You may even be able to sell and rent back the same property. Some companies even allow you to sell and buy back at a future date at a pre-agreed price should you wish to.

Remember: you have more options than you may think.

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