Property repossession - the role of the court
If you have fallen behind with mortgage repayments and your lender has taken a case against you, you will be summoned to court. The court will consider the cases put forward by you and the lender before making a decision about what happens next.
What the court hearing decides
At the hearing, a Master (a High Court Judge) will decide if an order for possession (to repossess the property) should be made. The decision will take into account the information you and the lender give.
The Master has authority to give you time to address the arrears (payment overdue) or the entire mortgage debt.
Adjourn the case
The Master can adjourn the hearing to allow you to:
- negotiate a repayment plan with your lender
- clear the arrears of your loan or mortgage
- prepare further legal arguments
Suspended order for possession
The court may postpone the date for delivery of possession if it is satisfied that the defendant is likely to be able, within a reasonable period, to pay any sums due under the mortgage, or to remedy any other breach of the obligations under the mortgage.
The order will specify how much of the sum the defendant is ordered to pay should go towards the mortgage repayment and how much should go towards arrears.
A suspended possession order cannot be enforced by the lender without the permission of the court, which will only be granted after a further hearing.
Amending the suspended order
If your circumstances change, for example you become unemployed or your salary is reduced, you may apply to the court to have the terms of the suspended order amended.
It's very important you tell your lender about the change in your circumstances and to negotiate an agreement. If you just stop your payments, your lender can seek a possession order from the court.
Regulated credit agreement
Where your mortgage or charge secures a regulated consumer credit agreement under the Consumer Credit Act 1974, a suspended order is called a time order.
If this act applies, it should be mentioned in a ‘regulated credit agreement’, which should be shown to the lender’s affidavit in the proceedings.
In some circumstances, the court may vary the terms of the credit agreement or mortgage to reduce the interest rate or extend the term of the loan so that the amount of the required monthly payments are reduced.
If you think a time order of this sort might be suitable for you, you should get legal or specialist advice – for example, from a solicitor or Housing Rights.
Stay of Enforcement of the possession order
After a Possession Order is granted but before actual repossession, you may apply to court to seek a stay of eviction which, if granted, prevents repossession for a certain defined period.
The stay of enforcement allows you more time to come to a suitable arrangement to pay the arrears on your mortgage/loan. It can also be used to allow you time to find alternative accommodation.
Making a stay application
A solicitor or Housing Rights advisor can help you make a stay application. You need to do this before eviction is due to take place.
An application for a stay involves filing and serving a summons and affidavit. The affidavit in support of your summons should:
- explain who lives in the house and give details of their age and any relevant medical conditions
- give reasons for the arrears
- outline your past and present financial and other relevant circumstances and the material change or changes in circumstances since the possession order
- include a completed financial statement
Making a proposal to the court
You need to put forward your best realistic proposal to pay off the arrears or the entire mortgage.
This means showing that you will be likely to pay the arrears within a reasonable time as well as paying the mortgage.
Where you offer to pay off some of the arrears each month, the proposal must allow the arrears to be cleared within a reasonable time but generally no later than the end of the mortgage term.
For example, if you have £12,000 arrears and 20 years left to run on the mortgage, an arrears payment of £50 or more each month will allow you to pay off the arrears in time.
The Master will expect you to make a higher offer if you can reasonably and safely afford it.
The Master may also adjourn to:
- allow your circumstances to be clarified
- make payments to the lender
- arrange to sell your house