What To Do If Your House Is Being Repossessed

When you default on a payment, panic can set in. You might try to ignore the situation, casting aside the unopened urgent envelopes and letting your calls go to voicemail, hoping it might all go away. Unfortunately, all that will do is make the situation worse.

The more you ignore the situation, the faster your home will be repossessed. As soon as a court order has been made for repossession, you’ll have just 28 days, in most cases, to pack up and leave your home.

When your house is being repossessed, the best step you can take is to open the lines of communication with your lender as quickly as possible. Repossession is not something banks and lenders will do lightly, and it’s usually only ever done as a last resort.

It can be embarrassing being in arrears and not being able to pay your mortgage, and the longer you leave it, the more you’ll likely want to put it off. But being honest can go a long way to determining a solution, or at least keep you in your home for longer.

You do not need to have only recently gotten into arrears to be able to take this step — you can start talking to your lender even if they’ve already taken steps to get a court order to repossess your home. You may be able to reach an agreement to start paying back what you owe on a schedule that works for both you and your lender. Be aware, however, that if court action has started, you will still need to attend court to explain your agreement to the judge.

After getting in touch with your lender, the next step is to try to work out a repayment plan. While you may not be able to pay your full monthly instalment, along with additional payments you may have missed, your lender may accept a smaller payment. This can show goodwill and go a long way to repairing the relationship and delaying — if not preventing — your home from being repossessed.

Your lender is obligated by law to consider any requests to change the way you pay your mortgage and any offers of payment you make.

If you’re in arrears and the value of your home is significant enough to cover the costs of your mortgage and arrears and leave you with enough to set up somewhere new, it’s worth considering selling your home. You have the right to sell your home at any time — even if court proceedings have started — until your mortgage lender physically takes possession of your home.

However, selling your home can take time — time you may not have if you are behind on your payments and your house is being repossessed. On top of this, there is no guarantee that your house will sell. At House Buyer Bureau, we can guarantee an offer on your home regardless of its history, location or condition, allowing you to sell your house and be debt-free in as little as seven days.

Several organisations offer free legal advice for people facing repossession of their homes. You can access the government’s Civil Legal Advice service if you’re eligible for legal aid. There are also charities — such as Step Change and Shelter — that can help you access and understand the information you need to address your financial situation and the repossession of your house.

If you have friends or family who you can stay with, consider renting out your home. The rental income should be enough to cover the mortgage and give you time to improve your financial situation so that you can eventually return to the property and resume repayments.

If you do not have anywhere temporary to stay rent-free, taking in a lodger may provide enough of an income boost to help you cover the mortgage repayments. When you can afford to do so, you can always revert to sole occupancy.

Homeowners are required to take out certain insurances when they commit to a mortgage, such as building and contents insurance. Many people choose to opt-in for additional cover, such as income protection insurance. If it’s been a while since you set up your mortgage, there may be support available that you’ve forgotten about or are unaware of. Check your insurance policies to see if you’re eligible to claim any financial support — to cover lost income, for example.

Contact the local benefits agency to see if you qualify for any additional support. You could be eligible for Reduced Earnings Allowance if your work hours have been drastically cut. Support for Mortgage Interest (SMI) is available to some homeowners, and this could reduce your monthly payments for a fixed period by covering some of the interest.

If the repossession process has started, you may face court action. Your lender must give you written notice at least 15 days before starting court action. They must also tell you the time and date of the repossession hearing and inform your council of the date within five days of receiving notification from the court in the event you need to apply as homeless.

When your lender starts a repossession action, you will receive a defence form from the court, which you must return within 14 days. This gives you an opportunity to explain why you think the lender should not repossess your home, as well as detail the efforts you’ve made to make an agreement to pay your arrears. This is why it’s vital to speak to your lender as soon as possible.

The repossession hearing itself will take place in a judge’s chambers. Your home cannot be repossessed unless the judge grants a repossession order. A repossession hearing does not mean you will be evicted from your home, and there are several decisions the judge may make, including granting a suspended repossession order, which will let you stay in your home on the condition that you make regular payments as agreed and set out in the order.