How to stop home repossession
People often worry unnecessarily about having their house taken by their lenders in satisfaction of their debt. From the first missed payment to having your house forcibly sold is a long, complex and difficult process for your lender to follow. The threat of repossession is often used as a ‘scare tactic’ by lenders and debt collectors, but the reality is that they are keen to avoid this if at all possible.
Debt can be isolating and often feels like there is nowhere to go for help. If you are struggling, make sure that you take expert advice as soon as possible. Galahad & Co has helped hundreds of people find the best solution to their debt worries – you are not alone.
Can you stop house repossession?
Repossession is a legal process which is granted by a judge. Assuming that the lender is successful, the repossession process can be briefly summarised as follows:
- The lender writes to you giving you notice that they are going to start the repossession process.
- The lender makes an application to the court for permission to apply for repossession.
- The court grants the application and sets a hearing date.
- The lender and borrower attend a court hearing where the judge decides whether the repossession order should be allowed.
- The judge issues a possession order setting out details of the repossession including the date by which you must vacate your property.
- If you do not leave by that date, the lender applies for a warrant of eviction and bailiffs remove you from the property.
- Your home is sold to pay off your debt and the cost of the repossession / sale.
- You will continue to repay any outstanding debt.
You can take actions to stop or at least delay the repossession at any of steps 1-6.
How to stop a repossession of a house
The first and most simple step to avoid repossession, or any enforcement (court) action, is to speak with your lender. You should do this as early as possible if you are struggling to keep up with payments. Be honest about your situation and your lender will be understanding. If you cannot pay, tell them and do not just ignore it. You may be surprised by how helpful they are.
You can always negotiate with your lender and are likely to be successful when you do. Do not forget that you have rights and your lender has responsibilities to treat you fairly under both the FCA rules and various consumer protection legislation.
It is also important to remember the old saying: ‘time is money’.
This means that your lender will always be in favour of receiving a small sum now rather than the prospect of receiving a bigger sum over a period of many years. This continues to be true when considering repossession, but it could still take many years to recover everything they are owed.
A judge will never be in favour of making a person homeless unless there is no other option to satisfy your debt. There are a number of reasons why a judge may refuse an application for repossession. For example, if there are children under 18 living in the house or if the predicted sale price is unlikely to satisfy your debt. If the court is satisfied that repossession is likely to cause significant harm to you or other members of the household, you have a good chance of stopping repossession.
Do not forget that your lender knows this too. You are likely to stop them pursuing repossession if you can convince them that they may not succeed, particularly if you can do this before they pay any court costs (e.g. before stage 2 above).
Don’t worry though – if your lender applied to the court, you now have an opportunity to put your case to a judge. There are two possible outcomes if you are successful in convincing the judge to stop repossession.
- The judge may dismiss the case: this means that you have ‘won’ and the lender cannot apply again for repossession.
- The judge may grant a suspended possession order: this will give you a chance to work with your lender and avoid repossession. A suspended possession order will set out the specific terms under which you can stop the lender from continuing with repossession. But, if you break the terms of the order, the lender can continue and possess your house.
You should get expert advice about your specific circumstances and any defence you may have.
This article is designed to demonstrate that you have options and empower you to defend your rights. This should not be used as a ‘do-it-yourself guide’ to defending proceedings and you must make sure that you take expert and independent advice when facing repossession.
How to prevent repossession
You do not need a lawyer to stop repossession, although it would be a very good idea to take as much advice as possible before taking any action.
There are various steps you can take to prevent possession. Some of these steps are formal such as defending yourself at the court hearing, but others can be informal such as negotiating with your lender directly.
You can speak with your lender to prevent repossession at any time. You may even be able to do this after the repossession order is granted and you have been ordered to leave your home. You are particularly likely to be successful if you can demonstrate that your personal circumstances have changed and you are able to meet your contractual repayments. This is not the only way to convince your lender though. External factors such as changes in the housing market may even influence their decision to let you stay in your home.
If you cannot prevent repossession through negotiation with your lender, do not despair – the court process is designed to be accessible and you will have an opportunity to stop repossession if you engage with the court.
The two most important stages to defend yourself are when the lender makes an application to start repossession proceedings and at the repossession hearing (if you are unsuccessful at first).
Any defence to the application should be made in writing. You will receive details from the court about how to do this. Make sure you set out your arguments very clearly and do not include anything which is irrelevant. You want the judge to understand your position quickly and simply.
If you are not successful here and the court sets a hearing date, you can defend yourself at this hearing. You can do this yourself or appoint a representative to address the hearing on your behalf (this could be a lawyer or any lay person as a ‘McKenzie Friend’). You will not be allowed to repeat any arguments you already made to try and defend the application, but you can raise any new arguments or anything you did not mention previously.
The hearing is very important and you should attend even if you do not plan to make a further defence against the repossession. At the hearing, the judge will also make important decisions such as costs, any restrictions which apply to the lender and the date by which you must evict a repossessed property. You can influence all these decisions.
Your final chance to prevent repossession comes after the judge grants the repossession order. You can still apply to the court to delay your eviction and the sale of your property. This is rarely successful, but is worth trying, particularly if your circumstances have changed and you are able to make some payments to your lender or if the repossession is likely to severely impact vulnerable members of the household (e.g. pregnant women or someone suffering from a severe illness).
Repossession can feel terrifying at times as well as in other alternatives such as an easy way out of mortgage debt. I hope we have demonstrated that it is neither, and that even when the repossession process has started, there are steps you can take to stop, delay and prevent your family losing their home.
It is always important to take independent and qualified advice, and with that help you should have a good chance of finding the best option for you – and a way to keep your home.