What Happens If Your Lender Proceeds To Issue A Claim For Possession Of Your Property?

Summary
Facing repossession is very stressful and you need to know your rights and what might or might not happen. Below we give you some guidelines as to how the system works and what your rights are.

What Happens If Your Lender Proceeds To Issue A Claim For Possession Of Your Property ?

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A possession proceedings notice will be sent to you by post a minimum of 2 weeks before the hearing date.

You will be expected to attend, and your case and any offers you might have made to deal with your arrears, will be heard and considered by a District Judge at a court hearing.

You are within your rights to have an advisor, for example from Citizens Advice, or a solicitor, to present your case during the court hearing. With permission from the judge they are allowed to speak on your behalf. Sometimes these hearings are heard in a courtroom but are not open to the public but usually are heard in the judge's private chambers.

If the judge decides to make a suspended possession, dismiss or adjourn the case you can stay in the property as long as you honour an agreement to pay off the arrears that you owe.

Another alternative is if the loan is covered by the Consumer Credit Act, the judge can issue a time order, reduce the interest rate charged and in so doing, the monthly repayment, or increase the term of the loan.

If this is unsuccessful, outright possession will be awarded to the lender and you will have to leave the property. A money judgment might or might not be included requiring you to pay back any money you owe.

Once judgment is made, the lender can then apply to evict you with a warrant for the bailiffs to do so. They are within their rights to do this when an outright possession order is awarded or if you are given a suspended possession but then default on the terms of agreement.

When the lender has obtained a warrant the bailiffs will give you notice of time and date of the eviction. You can apply for a stay of execution if you need more time to find somewhere to live but it will not necessarily be granted.

When the lender has taken possession of the property they will sell it and use the revenue to pay off the debt outstanding. They are obliged to get the best price but such sales tend to be at auction and generally make less than the market value.

At any time, if you feel you have not been treated fairly, for instance if you feel the sale process has been slow costing you more mortgage payments you should complain to the Financial Services Ombudsman (FOS).

In the unfortunate case that the property does not raise enough to cover the mortgage you are liable for the difference. Your lender may not chase you for this straight away but they can hold you to it for up to 12 years.