House Repossession Advice

House repossession. What to do to avoid losing your home.

House repossession is a legal process where a mortgage lender or secured loan provider takes ownership of a property.

Lenders only start court action to repossess your house as a last resort. If your lender contacts you about your mortgage arrears or secured loan arrears don’t ignore them.

The best thing you can do is talk to your lender. Let them know about your situation and the steps you’re taking to get your payments up to date.

They are more likely to help you if they know you're getting help.

If your lender can’t contact you they're more likely to go to court.

Possession hearings

A possession hearing takes place so that a judge can decide whether you can afford to keep your property. It doesn’t automatically mean that you'll lose your house.

Even if you've been given an eviction date, it's not too late to solve your problems.

Options to avoid repossession of your home

How to stop repossession

To stop repossession of your home you need to:

keep talking to your lender
try to improve your financial situation
work out a repayment plan

Lenders make money out of mortgages. They want to come to an agreement where you can resume payments instead of repossessing your home.

You have time to improve your situation and your lender must follow certain rules before they can start court action.

If court action has started, you can still speak to your lender and try to come to an agreement.

Speak to a debt adviser

You should get advice as soon as possible.

A debt adviser can help you:

decide on the best option
find ways to improve your finances
make a financial statement
work out a repayment plan

The breathing space scheme can help people with mortgage arrears.

It pauses the repossession process for up to 60 days while you get debt advice.

Talk to your lender

Contact your lender as soon as you miss a mortgage payment.

Explain:

why you’re in arrears
that you’re making effort to clear the arrears
that you will send them a repayment proposal soon

You can start talking to your lender at any point even if they’ve started court action. The sooner you contact them the better your chances of keeping your home.

Payment holidays

If you had a payment holiday, including a break in payments because of coronavirus, the missed payments will be added to the amount you owe for your mortgage.

Pay as much as you can

If you cannot pay your full monthly instalment, it's better to pay something.

Small regular payments can:

show that you’re reliable
help to build trust with your lender
show you’re trying to manage your budget
show that you’re prioritising your mortgage

Improve your financial situation

Take steps to deal with your mortgage arrears by:

looking at your income and outgoings
prioritising your mortgage and other debts
coming up with an affordable repayment plan

Think about selling your home

Selling your home could cover the costs of your mortgage and your arrears. If you are likely to have money left after the sale this could be an option to think about.

If you cannot afford a repayment plan you could think about an assisted voluntary sale.

Do not choose voluntary repossession

Voluntary repossession is when you leave your home and give your keys back to your lender.

In almost all situations it is a bad idea to choose voluntary repossession. Voluntary repossession does not clear your mortgage payments or your arrears.

Voluntary repossession still affects your credit rating.

You will continue to be liable for:

repayment of the arrears
monthly mortgage payments
other costs such as building insurance

You will also have to pay your lender’s costs for selling the property.

The council may well decide that you're intentionally homeless if you hand the keys back to your lender when you have nowhere else to live.

Before it goes to court

What your mortgage lender must do

Before a mortgage lender can repossess your home, they must:

tell you how much you owe
consider a request from you to change the way you pay your mortgage
respond to any offer of payment you make
give you reasons for turning down your offer of payment within 10 days
give you a reasonable amount of time to consider any proposal they make
give you 15 days’ written warning if they plan to start court action
tell you the date and time of a repossession hearing
let your council know within 5 days of getting notification of the date of the court hearing, in case you need to apply to the council as homeless

Finding a solution

Even if your mortgage lender starts a court action, you may still be able to reach an agreement with them.

You’ll still need to attend court to tell the judge about the agreement, unless the court tells you the hearing’s been cancelled or postponed.

If your lender is trying to repossess your home

This advice applies to Scotland

If you haven’t been repaying your mortgage or secured loan, you might be at risk of losing your home. Your mortgage lender might take court action to repossess your home if you’re behind on your payments.

What you can do now

You should consider getting independent financial advice before making any decisions about your mortgage.

If your lender has started legal action to repossess your home, you should get help from a Citizens Advice Bureau. You might be able to come to an agreement with the lender and get the legal action suspended.

Even if your lender has a court order to evict you, it might not be too late to find a way to stay in your home.

If you haven’t been threatened with legal action but you’re having difficulty paying your mortgage, options are available. Read more about what to do if you can’t pay your mortgage.

Respond to letters from your lender

If you’ve already had a letter from your lender and you haven’t replied, you’ll probably get a second letter. The second letter might give you a deadline for responding or making a payment.

It’s important to contact your lender and explain your situation. They can advise you about what to do next.

Find out how to contact your lender to deal with your mortgage debt.

If your existing arrangement to pay the arrears has broken down

If you’ve already made an arrangement with your lender to pay back the arrears and this has broken down, you might be facing legal action to repossess your home.

Your lender can still set up another arrangement to avoid evicting you.

If you can’t stop the case going to court, this doesn't always mean that you’ll lose your home. There are steps that your lender must follow, beginning with notices that they must send you to warn you that repossession procedures are starting.

Notices from your mortgage lender

If you’ve received letters from your lender and haven’t contacted them, they might:

send you a document asking you to pay the arrears - this is called a notice of default
send you a document which ends the mortgage agreement and asks you to repay all of the outstanding loan - this is called a calling-up notice.

Find out more about notices from your lender on the Shelter Scotland website.

What your lender has to do before they can take you to court

Your lender can only take you to court if they complete certain steps, called pre-action requirements.

Your lender must:

give you clear information about the terms of your agreement and the amount you owe
offer alternative ways of paying to avoid repossessing your home
not take you to court if you’re taking reasonable steps to stick to your lending agreement
give you information on how to get debt advice and suggest that you contact your local council to get advice about what will happen if you need to be re-housed.

Your lender has to tell your local council

If your lender serves you with a notice to repossess your home, they have to let the local council know that they’re taking this action and that you might end up homeless. They’ll do this by sending the local council a section 11 notice.

The local council will then get in touch with you to offer support and advice about housing. It might also get in touch with your lender if you want the local council to try to work out a solution.

If legal action is progressing and you’ve not heard from your local council, you should get in touch with the council’s housing department. You can find contact details for your local council on mygov.scot.

Going to court

Your case will go to court unless you’ve opted for voluntary repossession. This is when you leave the property and hand back the keys to your lender - it should always be a last resort.

If your lender is taking you to court to repossess your home, you’ll get:

a notice from your lender - giving them the right to sell your property
an initial writ - telling you that the lender has made an application to the court

Even at this stage, it’s not too late to negotiate a repayment arrangement with your lender. If you can, you should keep paying off your arrears, as this will be taken into account if you have to go to court.

The court will decide if you should be allowed to stay in the property or not.

Who can go to court

You can go to court if you’re an entitled resident. This means you’re:

the owner of the property - the person named on the title deeds. This person might not be the person with the mortgage
the spouse or civil partner - of the person with the mortgage or the owner
a cohabiting partner - of the person with the mortgage or the owner, but only if the person with the mortgage or the owner is still living with you and the property is your only or main home
a former cohabiting partner still living in the property - if the owner or the person with the mortgage has moved out and you have a child under 16 together who still lives in the property.

Do you need a solicitor

At the court hearing, you can represent yourself, get support from a lay representative or be represented by a solicitor.

It’s particularly important to have legal representation if you disagree with the lender about the amount of arrears that it claims you owe.

If you have a low income or are getting benefits, you could be eligible for help with legal costs for advice before a court hearing and for representation at the court hearing if you have a solicitor. Find out more about help with legal costs.

An approved lay representative might be able to help you if you don’t qualify for legal aid.

Using a lay representative in court

If you’re the person with the mortgage or an entitled resident, you can appoint an approved lay representative to represent you in court. A lay representative is someone who can help you prepare and conduct your case.

If you appoint an approved lay representative instead of a solicitor, you won’t be entitled to apply for legal aid. Read more about how to use a lay representative in court.

What can happen in court

Will you have to speak in court

You or your legal or lay representative will be asked to explain:

why you got into difficulties with your mortgage - for example, because you’ve had health problems or been made redundant
if you’ve done anything to come to an arrangement with your lender
why you haven't stuck to an arrangement if you’ve already made one
how you hope to pay off your arrears and get your mortgage back on track
if you’ve made efforts to find somewhere else for you and your family to live
how long it might take you to find alternative accommodation.

If you need more time to pay off the debt

If you think you can pay off all of your mortgage arrears in a short time, you can ask for the court to give you time to do this. This is called asking for the case to be continued.

If your case is continued, a date will be set for your case to go back to court. If you’ve paid off all your arrears, no further action will be taken. But if you haven’t kept to the agreement, the sheriff will decide if your lender should be allowed to repossess your home.

What the lender will say

Your lender will have legal representation. The solicitor should tell the court:

how much your arrears are
how long you’ve been in arrears
their view of how you came to be in arrears
about any effort they’ve made to contact you and come to an arrangement to pay off your arrears, including evidence that the pre-action requirements have been met
if you’ve kept to any arrangements you made to pay off your arrears.

What can the court decide

If your lender has applied to court for the right to repossess your home and you’ve opposed the action, the court can:

dismiss the case - this usually only happens if the lender has failed to follow the right procedures or doesn’t have a case
continue the case - for example, because you’ve made a new arrangement to pay off the arrears
give your lender the right to repossess your home - this is called a repossession order. Find out what happens if a repossession order is granted.

Asking the court to review its decision

You can ask the court to review its decision if you or one of the entitled residents didn’t appear and wasn’t represented in court when the decision was made. This is called recalling the decree.

Who pays the court costs

Your lender can usually pass on all their recovery costs to you. They don’t need a court order to do this.

Costs will be added to your mortgage account for every hearing. These costs will include:

court fees
solicitors’ fees and expenses
witness expenses.

The court might be able to order that some or all of the costs are not added, for example if you’re getting legal aid. But the terms of your mortgage agreement might still allow your lender to recover their costs from you.

The situation might be different if you’re getting legal aid. Your solicitor can tell you more about this.