What is a home repossession?
Home repossession is the process in which your home changes ownership due to non payment of a debt which is charged to your property e.g your mortgage
It is usually the last resort a creditor will take.
You should seek free debt advice from a charity at this point.
The home repossession process
The Home repossession process will usually start by your mortgage lender or loan provider contacting you about arrears on your account. If you are having financial difficulty you should respond to your lender informing them. Do not ignore the letter.
If no major improvements are made or you and your lender don't come to an agreement they will write to you informing you that they intend to start court proceedings. You can still try to negotiate with them at this point.
If all this fails, your lender will go to the local court asking for a possession order on your house.
The court writes to you
- The court will then write to you informing you of your court date & time, the reason the lender wants to repossess your home and a defence form for you to fill and return.
You Must reply to the defence form.
You can get free legal advice from the housing possession court duty scheme.
They will provide you with an adviser who will come to your hearing and assist you.
A judge hears the case
- A judge will hear the case and can decide to dismiss the case, adjourn the case so you and the lender have more time to negotiate, give the lender permission to repossess your house or give a suspended possession order which allows you to live in your home under certain agreements.
At this stage you may be required to pay all the lenders court costs, as well as yours.
The Judge decides
- If the judge decides your home should be repossessed you will have about 28 days to leave but you can ask for this to be pushed to 56 days.
If you don't leave your home or fail to keep up on your suspended possession order, the lender can ask for a bailiffs warrant and the bailiff will then remove you from the home.
You can ask the judge to suspend the possession order if you have found a way to pay the lender.
The cost of a home repossession
- You will be required to pay the cost of the bailiff and any mortgage interest still accruing on your home during the sale process.
The lender will then sell your home and pay you any left over or go after you if there is a short fall between what you owe and how much the property sold for.
Home repossessions vs your credit score
A repossession order is bad for your credit score. This, as well as the missed payments will stay on your credit file for 6 years and will ruin your chances of being approved for credit in the future.