Understanding the Repossession Process

This guide applies to specifically to England and Wales and does not constitute legal advice.

We've put together a quick guide below to help you understand why repossession takes place, what will happen during each stage of the repossession process and what you should do. Please be aware that the earlier you take action the more options you will have and the less you will have to pay in fees and penalties.

Why Lenders take Proceedings
Letters from your Lender
Summons from the Court
The Court Hearing
Allowed to Stay
Ordered to Leave
Life after A Repossession

Why Lenders Take Proceedings

Under the terms of your mortgage contract, your lender will have the right to issue repossession proceedings if you do not make your required payments. Normally two Months of arrears are sufficient for a lender to take action. In reality, lenders will try to come to an arrangement to clear the arrears and avoid taking proceedings.

If the lender has concerns about the level of the arrears, or is not satisfied with your proposals to repay them, they will take possession action in your local County Court. They do this so that they can take control of your property, sell it and recover the outstanding mortgage balance.

Back to Top

Letters from your Lender

In most cases, the first thing you will receive is a letter reminding you that you have missed one or two payments. It will normally ask you to:
• confirm how you intend to catch up on the missed payments, or
• contact your lender to discuss your financial situation

If your lender isn't satisfied with your proposals, or your arrears increase, it will probably write to you again. The second letter usually says that solicitors will get involved if you don't clear your arrears or contact your lender to discuss the situation within seven days. It is usually better to negotiate with your lender before solicitors are involved, as they are usually unhelpful.

Letters from your Lender's Solicitor

When solicitors get involved, they will send you a letter giving you seven days to pay off all your arrears or make a proposal for doing so. If they are not satisfied with your response, they can start court action without any further warning.

It is definitely still worth trying to negotiate at this stage. Even if you can't come to an agreement, the court is more likely to be sympathetic if you made an effort to sort things out before legal action was started.

If they are not happy with your response, they should write to you, warning you that they are going to start court action. They can then apply to your local county court for a possession order.

Back to Top

A Summons from the Court

If you have not been able to stop your lender from starting court action, it doesn't necessarily mean that you will lose your home. It's still worth trying to negotiate a solution before the hearing.

The court will write to you telling you when a hearing is to take place. This is called a summons. It is very important to reply to the court. Failing to reply can harm your case.

Back to Top

The Court Hearing

At the hearing, the judge will hear evidence from you and your lender before making a decision. The judge may:
• Adjourn the case
• Strike it out
• Grant a Suspended Repossession Order
• Decide that you should be evicted

Allowed To Stay

Whether you can stay in your home will depend on the type of decision the court made at the repossession hearing. You may be able to stay if the court decides to strike out or adjourn the case, or to make a suspended possession order.

You may have been allowed to stay in your home because there wasn't a good enough reason to evict you or because the judge believed you should be allowed to stay, on the condition that you can put the situation right (for example, by paying off your arrears) within a certain amount of time.

If you are not sure what the order said, you can ask the court office. If you don't understand what it means, get advice.
Back to Top

The Case was Struck Out

If the judge decided to strike out your case, it means that your lender didn't have the right to evict you, or didn't follow the correct procedure. You can stay in your home and your rights and responsibilities will be the same as before. However, your lender or freeholder can ask the court to evict you again in future if it gets new evidence and follows the correct procedure.

The Case was Adjourned

If the judge has adjourned your case, it means that the case couldn't be decided at the hearing.

If you have mortgage arrears, you may have to pay a certain amount each week as a condition of the case being adjourned. It is very important to stick to these conditions. If you don't, the judge is more likely to order you to leave when your case goes back to court. The judge should explain the conditions, and you should get written confirmation in the post when a copy of the order is posted to you. If it isn't clear, get advice.

Your case may have been adjourned indefinitely or for a fixed period of time. In either situation, you have the right to stay in your home until a final decision is made or you pay off the money you owe. You may have been given a date for another hearing when the case was adjourned, or your lender may have to apply for a new hearing after a certain amount of time or if circumstances change.

The Court made a Suspended Possession Order

If the judge made a suspended possession order, you can stay in your home as long as you keep to certain conditions. The conditions should be explained in the order, but if it isn't clear, get advice. In many cases, it will say that you have to pay a certain amount off your arrears each month and keep up with your ongoing mortgage payments. When you have paid off the arrears, you simply need to continue to pay your normal monthly payments when they are due.

If you don't keep to the conditions of a suspended possession order, you can be evicted very easily. For example, if you miss even one payment, your lender can apply for a bailiff's appointment straight away. There isn't normally another hearing and you may only get a few days' warning before the bailiffs arrive. If you receive a letter from the bailiff, get advice immediately. There may still be time to stop the eviction.

If you think you are likely to have problems sticking to the conditions of a suspended possession order, you should contact your lender and/or get advice immediately. Don't put off dealing with the situation, as your lender (or other creditor) may be able to evict you very quickly if you don't come to an agreement.

Even if the situation seems hopeless, an adviser may be able to help you find a solution. For example, if you have lost your job it may be possible to get the conditions of the order changed to make the repayments more manageable. If you want to change the conditions of an order, you will need to apply to the court and may have to pay a fee. However, if you are claiming benefits or have a low income you may be able to get help with these costs.

Avoiding Payment Problems in the Future

If you are worried that you may have ongoing problems affording your mortgage, you should get advice to stop your arrears from increasing. If your lender or its solicitor contacts you about your arrears, don't ignore their letters or phone calls. If you don't respond, your lender is much more likely to take you to court.

It may be possible to negotiate with your lender to reduce your monthly payments by extending the term of your mortgage or switching to a different repayment method.

Back to Top

Ordered to Leave

If the judge decides that your home is to be repossessed, the court order will asset a date for you to leave. If you have lot left by that date, your lender must apply to the court for a bailiff's warrant. The bailiffs will write to tell you when the eviction is to take place, and when they come, they can remove you from your home.

Eviction by the Bailiffs

If the court orders a repossession, it will set a date by which you have to move out. If you don't leave by that date, your lender or freeholder can ask the bailiffs to evict you. Even at this stage, it may be possible to stop the eviction.

If the court has ordered you to leave your home, get advice immediately. It may not be too late to delay the eviction or, in some circumstances, to stop it altogether. This is the case even if you have already had a letter from the bailiffs.

The bailiffs will come to your home and leave a form informing you of the date and time of the eviction. The amount of notice you get depends on your local bailiffs' office, but you should have at least a few days' notice. There are no rules about what time during the day they can come, but it will normally be within normal working hours.

It may not be too late to save your home. Depending on your circumstances, you may be able to stop or delay the bailiffs from coming to evict you. However, you have to apply to the court to do this, and need to take action quickly.

The bailiffs can physically remove you from your home. They can use necessary force to enter the property and can remove anyone living there. The locks will normally be changed to ensure you can't get back in. This will happen even if you are not in the property when the bailiffs arrive. The bailiffs can ask the police to be present if they think you might try to stop them from getting in. The police aren't allowed to help the bailiffs with the eviction but are there in case there is any disturbance. The police can arrest anyone who is violent.

The bailiffs won't remove any of your furniture or belongings unless the court has decided they should do so. The bailiffs will usually watch while you do this yourself. If you don't remove your belongings, they will be left locked inside.

Back to Top

Life after a Repossession

If your home is repossessed and you can't delay or stop the eviction, you will need to find alternative accommodation. If you lost your home because of mortgage arrears or other debt problems, it may be more difficult to find a place to rent or buy. You may be able to stay with family or friends for a while, but will also need to find long-term accommodation that you can afford.

Can I get help from the council?

Local councils have a legal duty to help some people who are homeless or about to lose their homes. They may be able to provide advice, emergency accommodation and/or longer term housing. However, if the council decides that you are intentionally homeless because you didn't pay your mortgage, it will only have to house you for a short time (normally 28 days, but this may vary).

In most areas, you can only get a council or housing association tenancy through a waiting list (the housing register). Waiting lists are often very long. How much priority you get on the waiting list will depend on your circumstances and how much accommodation is available. In some areas there is a lot of accommodation available, but in other areas you may have little realistic hope of being offered a place at all.

Can I rent from a Private Landlord?

Many private landlords run credit checks on prospective tenants. If your home was repossessed because of mortgage arrears, it may be more difficult to find a landlord who is willing to rent to you.

How will my Credit Rating be Affected?

People with a history of debt problems often find it difficult to get a credit and repossession is considered a serious offence. Credit providers usually check your credit history with credit reference agencies such as Experian and Equifax and your repossession will also be recorded with the council of mortgage lenders.

Paying off Mortgage Debts in the Future

After repossession has occurred the lender will sell the property in order to recover the debt and any fees and charges owed to them. If the money from the sale of your home isn't enough to cover your debts, you will still owe the outstanding amount to your lender and they are able to sue you to get the money back.

You may be contacted soon after the repossession to ask how you intend to repay the debt, although they may give you time to get back on your feet first. It is quite common for many years (there is no time limit) to pass before legal action to get back the money you owe is started. It is very important to get independent advice before you reply to any letters asking how you intend to pay off your debt.