Home Repossessions And Possessions
As a homeowner or tenant, it’s natural to be worried about what would happen if you fall behind on your mortgage or rent. Unemployment, illness or a sudden drop in income can soon make monthly payments unmanageable, especially if you don’t have savings and/or you’re living with a lot of unsecured personal debt. The type of legal action taken against you depends on whether you rent or own your home. A mortgage provider, normally a bank, can threaten repossession of your home, whereas a landlord seeks possession.
What to do when a claim arrivesIt’s an all-too-familiar story: you’re struggling financially and the last thing you want to do is open an ‘official’ letter that comes through the post. But ignoring a claim from your mortgage provider or landlord means you might not be able to come to an arrangement with them.
Remember that even if you are taken to court, you won’t automatically be evicted unless the lender or landlord has an outright possession order from the court. Even then, tenants can ask for a delay if, for example, they have a long-term illness or young children.
A court can also grant:
- Suspended possession order: Depending on the terms, you may be able to keep your home if you make agreed payments to your lender or landlord
- Adjournment: A judge can adjourn the hearing if he or she need more evidence
- Money judgment: You will have to pay whatever costs a judge decides, including mortgage/rent arrears, court fees and the lender’s legal costs.
- Dismissal: If a landlord has no legal reason to evict you, the court can dismiss (or strike out) the case against you.
I’m worried about the court hearing – do I have to attend?As much as you might want to avoid it, we always advise people to attend their court hearing. Remember this is not a criminal or public trial – it is a chance to submit your payment proposal privately to a district judge and the lender or landlord’s solicitor.
If the district judge thinks your offer is reasonable, he or she might grant a suspended possession order, which means you can stay in your home as long as you are able to make the repayments.
However, you could still lose your property if you breach the terms of the suspended possession order and the lender can apply for an ‘eviction warrant’ without further court action. Once this is in place, court bailiffs will set a date to visit your house and ensure it has been vacated.
What if I still can’t pay my rent or mortgage?In more serious situations, the court may decide you cannot realistically afford to clear your arrears so will make an outright possession order, usually effective in 28 days.
Should your circumstances change, and you can start paying back what you owe, you may be able to stop the repossession. You will need to be sure you have the funds and convince the judge of your ability to pay.
People sometimes fall behind on their mortgage or rent because they have high levels of credit card debts and outstanding loans. PayPlan offers free debt advice and can help you find the best repayment plan for your situation. For more details, click here, or call one of our advisers in confidence on 0808 278 4588.
This article was checked and deemed to be correct as at the above publication date, but please be aware that some things may have changed between then and now. So please don't rely on any of this information as a statement of fact, especially if the article was published some time ago.