Repossession Help

Can a possession order be stopped?

The short answer is yes, a possession order can be stopped! However it depends on your specific circumstances and how proactive you are in responding to the situation. Possession orders are typically issued by the court when a lender has taken legal action to reclaim a property due to arrears. If you're a homeowner facing a possession order, there are several steps you can take to potentially stop the order or delay the process, giving you more time to resolve the issue.

Probably the most important thing you can do to stop a possession order is to communicate with your lender as soon as possible. Lenders generally prefer to find a solution that avoids repossession, as it's a lengthy and costly process for them as well. If you've missed payments but can demonstrate a willingness and ability to make future payments, your lender might be open to negotiating a payment plan or restructuring your loan.

You also may be able to negotiate new terms that suit your current financial situation. This could involve extending the term of your mortgage, switching to an interest-only mortgage temporarily, or even adding the missed payments to the total loan balance. It's always important to be transparent about your financial difficulties and make a realistic offer of what you can afford.

If a possession order has already been granted, it’s not necessarily the end of the road, as you can apply to the court to have the order suspended or set aside.

If you can demonstrate that your circumstances have changed since the possession order was granted, such as securing a new source of income, starting a payment plan, or receiving financial support, you can request the court reconsider its decision. The court may suspend the possession order, allowing you to stay in your home as long as you stick to the repayment plan.

To apply for a suspension or to have the order set aside, you'll need to fill out the appropriate court forms and provide evidence of your changed circumstances or a new payment arrangement with your lender. If you're unsure about the process, seeking guidance or legal advice is strongly recommended to improve your chances of success.

The court itself can be a place of support in this process. During your court hearing, the judge will review your financial situation and if they believe you have a genuine ability to make payments, they may agree to delay or stop the possession order altogether.

Judges have the discretion to suspend an outright possession order and allow you to make repayments over time, especially under the “Pre-Action Protocol for Possession Claims,” which encourages lenders to seek reasonable alternatives to repossession.

It’s critical to bring to court any evidence of your income, expenditures, and any agreement you’ve reached with your lender, as well as a proposal for how you plan to keep up with your payments in the future.

If you're facing a possession order, it's vital to get professional advice. Services like Citizens Advice, debt charities like StepChange, and your local council can offer guidance and support. You might also want to consider getting legal representation, particularly if your case is complex or you're unsure how to proceed.

At Repossession Help, for example, we often guide clients through the court process, help negotiate with lenders and offer tailored strategies to prevent eviction. Taking early action and getting proper advice can make all the difference when trying to stop a possession order.

In some cases, if your mortgage is a regulated agreement (usually this applies to second-charge mortgages), you can apply for a "time order" under the Consumer Credit Act. A time order allows the court to change the terms of the loan agreement, possibly reducing your monthly payments or extending the loan term to make repayments more manageable.

This is a lesser-known option, but it can be highly effective in giving you breathing room when facing financial hardship.
A possession order can be a frightening experience, but it doesn’t necessarily mean the loss of your home is inevitable. The key is to act quickly, communicate openly with your lender and seek professional guidance. It’s not an easy path, but with the right strategy and support, you can potentially stay in your home and avoid repossession.

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How many extensions would a court allow before the court eventually refuses further extensions?

I have just been talking to a prospect that got in touch with us through our website and I found out that his situation was (in our experience) very unusual. He has been in mortgage distress for some while now, but what was really unusual was that he had previously had been granted two eviction orders form the court and was now applying to have a third!

This really got my curiosity, so much so that I felt compelled to research just how many extensions a court would allow before eventually refusing any further extensions, this is what I found:

Courts can grant extensions or suspensions of repossession orders in cases of mortgage arrears, but there is a limit to how many times this can be done before the court will eventually refuse further extensions. Generally, if you can demonstrate the ability to meet your current mortgage payments and gradually pay off the arrears, courts often allow suspensions or adjournments. You can ask for a "time order" under Section 36 of the Administration of Justice Act (1970), which gives you more time to clear arrears if you can demonstrate a viable plan for catching up​.

However, if you repeatedly fail to adhere to repayment agreements or miss further payments, the court may stop granting further extensions. The decision is highly dependent on your individual case and the borrower's circumstances. For example, if a you show that your financial situation is unlikely to improve or consistently breaks previously agreed repayment plans, the court is more likely to grant an outright possession order​.

According to Shelter, there are cases where borrowers have been able to obtain multiple extensions, but ultimately, courts prioritise the lender’s right to recover the debt. If, after several adjournments or suspended orders, the borrower fails to show progress in clearing the arrears or paying the mortgage, the court will likely proceed with the repossession.

Specific cases of multiple extensions have occurred, but details of such cases are often not publicly available due to privacy concerns. However, there are documented instances where courts have allowed multiple delays, especially if the borrower could demonstrate temporary hardship or a plan to sell the property, but in the end, the courts will eventually issue an outright possession order if repayments are not met​.

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If your house is repossessed, do you keep your equity?

Another question that comes up often is “if my house is repossessed, do I keep my equity?”

When your house is repossessed due to mortgage arrears, the lender will typically sell the property to recover the outstanding loan balance. However, if the sale of the house fetches more than the outstanding debt, you may receive what is known as “equity” from the sale.

Once your house is repossessed, the lender will sell it, often at auction or through an estate agent. They aim to recover the money owed on the mortgage, but the sale price can sometimes be lower than market value, depending on market conditions and how quickly they want to sell. From the sale proceeds, the lender will deduct the outstanding mortgage balance, any interest or penalties accumulated and repossession costs, which can include court fees and auction fees.

If the sale price of your property is higher than the total amount owed (including fees and penalties), the remaining amount after settling the debt is your equity. The lender must return this surplus to you. However, if the sale price doesn’t cover the full amount of the debt, there will be a shortfall. In this case, you would still owe the remaining balance to the lender. The lender could pursue this through further legal action.

Key Considerations to take into account are the timing of the sale and the method used (e.g., auction) as these can affect the price dramatically and often repossessed homes are sold for less than their market value.Any second charges (like other loans secured on the house) or joint ownership agreements will also affect how much equity you might get.

Yes, if your house is repossessed and it sells for more than the outstanding mortgage debt and associated costs, you will receive the equity from the sale. However, if the sale price is insufficient to cover the debt, you may still owe the remaining balance.

It’s always a good idea to seek advice before repossession happens to explore all available options, like negotiating with the lender or selling the property yourself to maximise your equity.

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