What to do if you have received a repossession letter

Help – I have received a repossession letter for my house!

Getting a letter for repossession is a nightmare scenario for any homeowner where there remains money owed on the property. Should you find yourself in the unfortunate position to have fallen into arrears with your repayments and the lender has sent a repossession letter, it is of paramount importance to get good financial and legal advice. Prompt action when your house is being repossessed can make it possible to negotiate a compromise agreement with the lender. You may be able to avoid losing your home or at least to slow down the process of repossession to give your financial situation time to improve.

To repossess a property, lenders need to take out a court action to do so. Since the 30th of September 2010, the law has changed and any new cases are dealt with under the new legislation. Due to the new law, lenders cannot simply rush into repossessing your home, but rather they are obliged to take reasonable action to help you avoid losing your home.

It is important to negotiate with the lender after taking financial advice. Sometimes it is possible to make a new arrangement with your lender about how much you need to repay every month. Even if you had already negotiated a more manageable way of making repayments before, but still cannot afford to pay the new instalments, you will still be able to renegotiate for a second time. Your lender is obliged by law to help you avoid having your house being repossessed.

If a court order for repossession goes ahead there is a clear procedure that your bank or building society must follow and you may not necessarily be evicted. By law your lender has to send you letters giving notice of what action the court is taking. Different time scales apply to each step in the process giving you time to respond. At this point it is essential that you get legal advice to support you with this process so that you do not lose your home due to an oversight.

The notices your lender must send you include a notice of default, a calling up notice requesting you to repay the outstanding sum of money in its entirety and an initial legal notice for repossession of your property. Subsequently, each case of repossession must go to court. This gives homeowners another chance to re-negotiate with the help of the court and possibly your local authority’s housing department to reach an arrangement with the lender.

Should the court decide in favour of the lender and no new arrangement can be found, it will issue a repossession order for your house. Even though your lender may receive the decree for repossession by the court, there is still a chance at this moment to re-negotiate with your lender to continue making repayments and to stay at your property. Should this not be possible for you and the repossession goes ahead, your lender must give you at least 14 days to leave the property. If you are still at the property after this deadline you will receive a letter giving you notice of when you are due to be evicted.

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