Despite what you’ve heard, you can stop a repossession order at any time, nearly up until eviction day even! Let that great news sink in for a minute. Now that you’re a little more relaxed, let’s look at how you can do it, shall we?
No matter how you go about stopping a repossession order, you must sort out how you would like to deal with your mortgage problems. At the very least, you should start making a plan and then convince your lender to agree with you. Believe it or not, the law requires lenders to be open to receiving your suggestions, whether they like them or not.
However, it’s not enough to just write a brief letter to your lender saying that basically:
“I’m working on my arrears. Please don’t start trying to take my house away from me yet.”
You’ve got to present them with some kind of clear, fairly reasonable plan that could work to resolve the debts you owe them. Remember that it’s better to present some kind of repayment strategy to them rather than just sit back and do nothing. Taking no action just makes you appear to be uncooperative and gives them the legal upper hand.
However, starting a written dialogue with the lender will at least buy you more time to get your life together, if nothing else. Plus, it’s never too late to write up a new mortgage proposal idea to your lender. You will need to keep copies of all the letters like these that you send to your lender as well as everything they send you. It’s tempting to think that a few phone calls can be a shortcut for you, but you’re going to want to deal with the lender in writing instead to generate a paper trail that you can show in court if they try to legally weasel you out of your home in an unlawful way.
Here’s how to make a plan to settle your mortgage debts:
Now before you write your brilliant action plan to your lender, you need to have a legitimate plan that could actually work, obviously. This part seems like the hardest bit, but don’t panic yet. Go through this checklist to see if any of these options could work for you:
- Have you worked out your monthly budget? Go through your list of last month’s expenses and see if you can modify your lifestyle to cut back on any of these. Also, consider what kind of side jobs you could take on to boost your income. You may need to show copies of your financial statements proving income and expenses to back up your mortgage-negotiation proposals too, so start putting this proof together now.
- Can you get a cheaper mortgage with another agency? You may need financing to settle what you owe to your current lender, but in the end, you could have lower monthly payments by transferring your mortgage elsewhere. The Money Advice Service website has more details about this choice.
- Could you keep your mortgage payment schedule if your lender gave you a temporary break to catch up on your finances? If so, then ask them to either reduce your required payments for a certain period of time, stop billing you for mortgage payments temporarily or extend the lifespan of your mortgage in order to lower the payments, even though lengthening a mortgage means you’ll pay more interest over the years.
- Do you have a shared-ownership scheme? If so, consider selling back some portion of the ownership of your property to the landlord for “flexible tenure.”
- Are you panicking now because none of these options sound doable? Then contact your nearest Citizens Advice Bureau for free help from a professional debt adviser. They might recommend that your best route is to contact an agency like TIC Finance Ltd. to get special financing for stopping the repossession of your house.
For more information on any of these points, read up on them in the mortgage-help section of Citizens Advice.
Write the first letter to your lender attempting a mortgage negotiation
Look on the last mortgage statement or letter you received from your lender to get the correct address and a name of the person or division of people handling your loan. Don’t get cheeky and come up with some clever opening lines; keep the tone of your letters kind but formal.
Tell them in your own words a summary of why you’re behind on the mortgage payments and how you’d like to make up the payments. Offer to pay back a little extra for a few months if you can find a way to afford it. Describe your bright idea here, inspired by the points just mentioned above about how to settle your debts. Include an optimistic statement about how your financial matters will eventually improve due to your plan to do anything like increase your income, receive insurance benefits, get government financial assistance or take out another type of loan.
Close on a positive note by mentioning anything good about your history, like previous payments you’ve made on-time and if you still have equity in your home, meaning that your property’s worth more than the amount due on your mortgage. Just give your lender a good reason to file your case into the “not urgent” category of papers they’ve got to deal with. They’ll appreciate hearing something from you much more than waiting around to see if you care enough to respond to their notices about late payments.
Learn more about those free mortgage-rescue services you could qualify for
Have you ever heard of the United Kingdom’s Abhaile Scheme for mortgage arrears relief? Contact them to see if you’re eligible for in-depth, free accountant or solicitor advice.
Alternatively, reach out to someone from Shelter or Civil Legal Advice to see if you can apply for any other government benefits.
If your lender has already filed a claim against you, take these steps
Here’s the part where you need to put together evidence that you can be a responsible, reasonable adult, someone the judge can sympathise with. Contact your local county court and ask about how to get free legal representation for your repossession hearing, which is available in most major county courts.
As Citizens Advice notes under their tips to prepare for your hearing, it’s time to get together all the papers that support your claims to keep the property. If you have written a few letters to the lender trying to renegotiate your mortgage, now is the time to bring copies of those letters with you to court as evidence that you’ve been “cooperating.” Bring all of your financial statements, the defence form and proof of any benefits claims you’ve made with you to court. The better prepared you are, the more likely the judge is to take your side by perhaps giving you more time or working out a more reasonable debt-settlement plan for you.
If the court hearing flopped and they’ve issued the repossession order, use one of these last-resort measures to stop it:
- Ask a legal adviser if your circumstances qualify to file for a new order to keep your home. You may be able to suspend the possession order or appeal to another judge.
- Try again to make a new financial agreement with your lender. They can renegotiate your terms and repeal the repossession order even up until the day of eviction.
- Consider getting a bridging loan from TIC Finance Ltd. to resolve your mortgage arrears immediately and stop repossession.