Obviously, if you are interested in reading a blog post entitled, “Help, my house is being repossessed!” then you or someone you know may be facing serious financial difficulties as this is just about the worst possible scenario.
What do I do if the Court grants a Repossession Order?
If the Court does grant repossession then your lender will want to sell the house to repay the debt owed to it. If you are threatened with repossession and it really does go this far, i.e. end up in Court, then always seek legal advice. You can get free advice from the Housing Duty Scheme, by Community Legal advice on 0845 345 4345 at around 100 Courts in England and Wales. Debt Counselling agencies can also provide information.
My house is being repossessed – Am I liable for any Mortgage Shortfall?
If there is a shortfall – known as the mortgage shortfall – between what the house sells for and any outstanding mortgage then you may be pursued for the debt although it is not a ‘priority debt’ like Council Tax, so the mortgage lender is not allowed to take your possessions in lieu of the debt. You can be pursued for the balance of the mortgage debt for up to 12 years and 6 years for any interest on the outstanding loan. You will also be liable for any legal fees and estate agent’s fees up until the house is sold. If your home is being repossessed, check to see if you are eligible for the Mortgage Rescue Scheme and/or check to see if you are eligible for emergency housing through your local Council. Start with this checklist if your house is being repossessed:
- Ask your mortgage lender for a breakdown of the account – so you know exactly what you owe
- Ask your mortgage lender to write off the debt
- Ask your mortgage lender to accept a full and final settlement offer of payment – it may not be the full amount owed, but they may accept it as it saves them the hassle of pursuing you
- Ask your mortgage lender not to pursue the shortfall – explain your circumstances and see if they would be willing to write off difference between the mortgage owed and the sum realised on sale
You may also be able to dispute liability for the mortgage shortfall – take legal advice and see if this is a possibility.
- You may not get market value for your property
- If left too late a sale may not complete before repossession
- You may have to move out quickly