Quick Move Now deals daily with people who are facing repossession. We understand just how stressful and confusing it is, so we have put together this guide which explains the different stages of the house repossession process and tells you how to stop repossession at any time.
There are three main points to bear in mind¦
- The eviction process costs the lender a huge amount of time and money, so they would always prefer to negotiate an agreement
- The sooner you act, the more co-operative they will be
- The process doesn’t end with the eviction – you will still be liable to cover any shortfall to the lender
In every way, it is better to stop repossession than to suffer the consequences of it. Here’s how to do just that…
STAGE 1: MISSED PAYMENTS
At this stage, you can negotiate a payment plan with the lender. They understand that sometimes finances become tight, for instance due to unemployment, and will be prepared to work with you to get through the difficult times. In general they allow three months to be missed before they progress the proceedings to the next stage, however, the earlier you agree a new plan with them, the smaller the amount of arrears to be paid back.
STAGE 2: LEGAL NOTICE
This is when the lender feels that they cannot reach agreement with you so they need to begin formal proceedings and any negotiations need to take place with the solicitor. You will notified with a solicitors notice that this stage has started. The situation usually remains at this stage for another three months so if the issue is a short term one, it is likely that you will be able to sort out a plan for repayment of arrears and the proceedings will be dropped. In the event that you can’t reach agreement, the solicitor will start legal repossession proceedings.
STAGE 3: LEGAL PROCEEDINGS
Many people give up when they reach this point and just accept that repossession is going to happen to them. This does not have to be the case! Remember that the lender would rather reach agreement and if you are willing to do this, they will still suspend proceedings. At this point, if you are able, a contribution towards the arrears would probably be enough to suspend proceedings. Even if you can’t make up the arrears, the fact that you have been trying to co-operate and communicate with the lender and their solicitor will be taken into account in court.
STAGE 4: COURT ACTION
If you go to your court hearing armed with proof that you will be able to continue to make your regular payments and clear the arrears accrued by the end of the mortgage term, it is likely that the court will suspend the repossession order. The main thing to remember here is not to over-promise. If you do not keep up with your new agreement, the proceedings can continue from this place in the future, without going through the early stages again.
STAGE 5: EVICTION
If it is agreed at the court hearing that you can’t make up the arrears, you are given approximately 10 – 14 days to voluntarily vacate the property. If you don’t do this, the lender will apply for permission to evict you, which will take a further three weeks or so. Even at this late stage, you can still halt the proceedings in one of two ways. You can either clear the arrears and begin making regular payments again or you can show the court that you have a buyer for the property. If you don’t do either of these things, an eviction notice will be served and you will be forced to vacate the property. As stated earlier, after the lender has sold the property and recovered their costs, you will be liable for any negative equity. It will also be very difficult for you to obtain another mortgage in the future.
We can see that there are many opportunities for you to negotiate with the lender and their solicitor, as long as you are able to resume regular payments and work towards clearing the arrears. If you are in this position, we strongly recommend that you are as co-operative as possible and communicate earlier rather than later.
If this is not you, and you don’t think you will be able to resolve your financial issues but don’t want to be left with negative equity to clear, there is another way. Selling to a home buyer ensures you speed, certainty and convenience. You get the cash in enough time to stop the repossession, you get certainty that the sale will not fall through and you get the convenience of choosing your completion date so you can decide when you would like to move out.