Amongst the many debt-related terms in existence, the word ‘repossession’ can elicit perhaps the most emotive response from those struggling to pay back their mortgage.
The idea of your home being taken from you due to non-payment is frightening and the feeling of not being in control of the roof over your head can lead many to panic and make rash decisions. However, as with all things financial, there are answers and you are not alone.
Here’s our best advice for dealing with repossession.
Who can repossess my home?
First and foremost, your mortgage lender. Having loaned you the funds to purchase the property, they could take the building off your hands if you fail to meet the terms of the loan.
Repossession can also rear its head if a bankruptcy order is made against you or if a local authority such as the council has to make a compulsory purchase of your home (e.g. due to major local developments such as new railways).
Can I delay repossession?
Early action is key – don’t wait for repossession. If you’re in arrears with your mortgage, beat your lender to it by getting on the phone as soon as possible to discuss your situation. Most lenders will listen and, possibly, agree a new payment plan with you.
It is important to remember that mortgage lenders can’t repossess your home overnight – there are a number of steps they have to take. Each stage gives you the opportunity to resolve the problem with your arrears, and you should grab each one with open arms.
Often, it will take months for a repossession order to go through, but acting quickly is essential if you are to prevent it from happening. Keep the conversation going with your lender
What will happen in court?
Firstly, make sure you attend the hearing. If your lender takes you to court, it is another opportunity to argue your case and present an alternative action to that of having your home repossessed. Arrive on time, be clear and polite.
Judges have powers to ensure you can stay in your house while the arrears are dealt with. They will also ensure the lender has followed all of the rules and that the repossession isn’t unjust.
Reaching court doesn’t mean you will automatically lose your home.
My home has been repossessed. What happens next?
If repossession is inevitable and completely unavoidable, you must start planning for the next chapter in your life. Seek alternative accommodation either by renting or calling on the help of a close family member or friend.
It should be remembered that repossession doesn’t necessarily mean your mortgage or other debts will be written off. If they are still owing, it is important to ensure you are able to repay them to avoid further financial complication. See IVA & bankruptcy.
Final thought on repossession
If a repossession notice is served, talk to your lender. The thought of someone taking your house from you will no doubt send shivers down your spine, but if you don’t act, losing your home will be an inevitability.