Understanding repossession procedures

Find out how the repossession process works and what you should be aware of.

If you have mortgage or secured loan arrears, your lender may try to repossess your house to recover their money. Repossession is a legal process allowing lenders to take control of and sell your property to settle your debts.

As mentioned in CCCS’s previous blog entry, protocols exist to make sure that lenders only pursue repossession as a last resort, having worked with the debtor to take all reasonable steps to prevent the situation arising.

It is important to engage with your lender, as they are more likely to go to court if you ignore them. Lenders have different help options available depending on their internal policies, and government schemes exist to help debtors with mortgage problems too.

However, if it does take place, understanding the repossession process is beneficial for debtors.

How does the repossession process work?

Having exhausted all other available options, your lender may apply to the courts to gain a possession order.

A court hearing will be arranged, which the debtor should always attend if possible. The hearing is your chance to explain your situation, and to put forward your case as to why your lender should not be granted the right to repossess your home.

Preparing a full budget detailing your income and expenditure, preferably with the backing of an impartial advice service such as CCCS, will be invaluable.

If you do not attend the court hearing, you will lose the opportunity to present your case, and it is likely the court will find in the lender’s favour. You will then need to call the courts to discover the outcome of the hearing.

Possession orders

At the hearing, two types of possession order can be granted:

• Suspended possession order

A suspended possession order means your lender can’t repossess your property as long as you keep up with monthly payments defined by the court. The court usually stipulates a payment covering your normal contractual monthly amount, with an additional sum to clear your arrears within a reasonable time. This can be deemed to be any period up to the remaining term of the mortgage.

• Outright possession order

Outright possession means that the courts have given your lender possession of your property. You will be given an eviction date for 28 days after the hearing, and must move yourself and your belongings out of the property by this date. On the eviction date, bailiffs may change the locks to your house.

If you have been given a suspended possession order and cannot afford to make the payments, it may be possible to ask the courts to alter the order.

Even if you have an outright possession order and an eviction date, it may still be possible to make arrangements to keep your home.

You should contact a free and impartial organisation such as CCCS for help as soon as possible. CCCS’s specialist mortgage arrears and repossessions team will be able to advise you of your best course of action.

CCCS is contactable by freephone helpline (0800 138 1111), Monday to Friday, 8am to 8pm, or online via the charity’s web-based counselling service, Debt Remedy.