Repossession: what should I do?

Repossession is a complicated subject with serious consequences.

This page was written to give some general information about creditors, courts and repossession and isn't intended as a substitute for personal, professional advice!

Avoiding repossession

Whether you've missed one payment or you're about to be evicted, the sooner you act, the better your chances will be of avoiding repossession.

Whatever your situation, you're probably wondering what's likely to happen next.

What can I expect?

It depends what's happened so far. Where are you right now?

  1. I'm in arrears on my mortgage / secured loan repayments
  2. I've been issued with a default notice
  3. I've been given a date for a court hearing
  4. I've had a Suspended Possession Order
  5. I've had an Outright Possession Order
  6. I've had a Warrant of Eviction (also called Warrant of Possession)

I'm in arrears on my mortgage / secured loan repayments

Everyone has months when money is tight. Creditors understand this and are often prepared to be sympathetic and to work with you to bring your payments up to date.

Understand why you are struggling. If you are finding it difficult to pay your mortgage / secured loan because you are paying too much to your non-priority / unsecured creditors, maybe a consolidation loan / remortgage or a debt management plan will help you reduce your outgoings to an amount you can afford.

Start by just talking to the creditor and explaining the situation. Explain the reason you have fallen into arrears - is it ongoing or was it a one-off? Can you claim against any insurance policy you have? What help can your creditor offer you? How much extra can you realistically afford to pay each month towards clearing your arrears, and when? Keep a note of the dates and times of your calls for reference and ask for the name of the person you speak to.

You should aim to clear your arrears in the shortest possible time, but be sensible - don't agree to an arrangement you know you can't keep up with. Write down your income and expenditure and be prepared to explain where your money goes. Send a copy to the creditor if necessary. Try to understand what the creditor's procedures are; if you cannot meet their demands today, ask what will happen next - it may be that they can offer more flexibility at a later stage in the process.

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I've been issued with a default notice

A default notice is an official letter telling you that you've broken the terms of your mortgage / loan and what you must do to bring your account up to date. A record of the default notice is made with the credit reference agencies. This is the first stage in the formal recovery process and your creditor cannot take further action, including court action, unless a default notice has been issued.

However scary this sounds, it's not too late. If the arrears can be paid in full within one month, then the default will never be registered. Even if you can't pay your arrears straight away, most creditors would prefer to come to an arrangement with you without the need for court action.

Even if you've spoken to them before, talk to the creditor again and discuss the situation - explain the reason you have fallen into arrears and any attempts you have already made to come to an arrangement to pay them back. Can you claim against any insurance policy you have? What help can your creditor offer you? How much extra can you realistically afford to pay each month towards clearing your arrears, and when? Ask what the creditor's procedures are; if you cannot meet their demands today, ask them to explain what will happen next.

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I've been given a date for a court hearing

Firstly, it is vital that you attend.

This is your opportunity to ask the court to make a decision that takes your circumstances into account. If you don't turn up, the court will make a decision in your absence.

You'll get a fair chance to explain how you got in arrears and explain that you're doing something about it. Use whatever time you have to prepare for the hearing so you can show that you're serious about repaying your debt.

Be prepared to explain the reasons why you have fallen into arrears. Tell the court about any attempts you have already made to come to an arrangement with the creditor and about any steps you may have taken to improve your situation. Prepare a list of your income and expenditure to show how much extra can you realistically afford to pay each month towards clearing your arrears in the shortest time.

Understand why you are struggling; if you haven't already, you should look into the different options that are available to you. If you are finding it difficult to pay your mortgage / secured loan because you are paying too much to your non-priority / unsecured creditors, maybe a consolidation loan / remortgage or a debt management plan will help you reduce your outgoings to an amount you can afford.

When you go to court, it's important to take proof of your situation with you - for example, your payslips, household bills and anything that shows you're sorting things out.

At this stage, it still isn't too late to try to make an arrangement directly with your creditor. If you are able to come to an agreement, you should still attend the hearing so you can be sure that any court order granted is on the terms you have agreed.

If the judge believes you can pay back the arrears in a reasonable time, it's likely that a Suspended Possession Order will be granted. This may be at the amount that you offered, or it might be at a different amount that the court thinks is reasonable. Stick to the terms and your home will be safe from repossession.

If the court doesn't, an Outright Possession Order will be made.

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I've had a Suspended Possession Order

All you need to do is stick to the terms set by the court - once you've paid back the money you owe, your home is safe from repossession. (But if you don't stick to the court's terms, the creditor may apply for a Warrant of Eviction.)

If the order was made at a hearing that you didn't attend and you are worried that the payments are too high and that you cannot keep to its terms, you can make an application to the court to request a hearing to ask for the order to be changed.

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I've had an Outright Possession Order

Did you attend the court hearing when the order was made?

If not, you can still make an application to the court to request a hearing to ask for the order to be suspended and to put forward a proposal to pay the arrears in affordable instalments.

If the court has already considered your offer and decided not to allow you time to pay, because the judge thinks that you either can't or won't make the repayments, you will be given an eviction date - it could be 6 weeks or even sooner.

If you haven't already, you should seek immediate expert advice.

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I've had a Warrant of Eviction (also called Warrant of Possession)

You still have some time, so don't panic - but don't waste any time either.

Have you fallen behind on a suspended possession order? If you don't know already, you need to talk to the creditor to understand why the warrant has been issued.

You can make an application to the court to request a hearing to ask for the warrant to be suspended. You will need to explain the situation, the reasons you have been unable to stick to any previous court order and your proposals for how you can put things right.

Expert help - the sooner the better

Obviously, dealing with a default notice is much simpler than negotiating after an order for possession! You can ask for professional help at any stage - but you could save yourself a lot of time, money and worry if you get expert advice sooner rather than later.

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