Step 2 – Court Process
If your arrears progress and you haven’t managed to create a repayment plan with your lender, then the next stage may start, which is, a court process to gain a possession order.
A lender can only repossess your property if the court grants permission.
Understanding Possession Orders
There are three different types of orders for possession that the court can grant and each can have a different outcome.
Being in receipt of a possession order, in and of itself does not mean that you are about to be thrown out of your home tomorrow or that your house is about to be taken from you.
It means that a process has started, at the end of which and in the worst-case scenario, your home could be repossessed.
1. An outright possession order
An Outright Possession Order means that the lender will have a legal right to take possession of the property after a set period of time; normally, 28 days.
Without any changes, this means you will have to leave the house within this timeframe or face an eviction notice.
However, extensions may be granted by the court on exceptional circumstances.
In this timeframe, you are still in a position to negotiate with your lender regarding repayments of your arrears, which, if accepted, will mean you can continue to live in your property.
But after the time has lapsed and if you have neither renegotiated your repayments nor left the property, then your lender can then apply to the courts for an eviction notice, meaning that you will be removed from the house by bailiffs.
2. A suspended possession order
Suspended Possessions Orders are quite common. What this means is that you can stay in your home, as long as you meet certain requirements. For example, if you can agree on a repayment plan and start to pay off the arrears then, as long as you keep to this, you can stay in your home and your lender will not repossess.
You can also request a suspended possession order if you want to sell your home yourself and pay off your debt that way. You can ask the court for a reasonable period of time to allow you to do this. If this is a route you wish to take then there are options of companies that can offer quick purchases of your property.
3. A time order
Time orders are less usual but are still worth knowing about. A Time Order is when the court changes the amount you pay on your mortgage for set period of time to help you get back to a good position. This can include changing the amount you pay, changing the interest rate and delaying the next time you have to make a payment.
It is important to note a time order is usually only made on specific types of loans, like a second mortgage.
