Home Repossession Letters and What They Mean.
Receiving a letter about home repossession can be a stressful and worrying experience. Understanding what the letter means and what steps you can take is so important.
I have been asked about these types of letters and before I go into the different types you may receive if your mortgage is in arrears, we need to understand what exactly is home repossession by your lender?
Home repossession occurs when your lender takes back your property because you haven’t been able to keep up with your mortgage repayments. Your lender can then sell the property to recover the money you owe.
There are several different types of letters you may receive in the lead up to a repossession:
- Pre-action letter: This is a formal warning from your lender that they intend to repossess your property if you don’t bring your mortgage payments up to date. It will outline the amount of arrears and may offer options to discuss repayment solutions.
- Notice of Seeking Possession: This letter informs you that your lender has applied to the court for a repossession order. The letter will include a court date and details on how to defend the claim.
- Standard Possession Order: If you don’t defend the court claim or come to an agreement with your lender, the court will grant a standard possession order. This gives your lender the legal right to repossess your property.
- Repossession Order: Once the lender has a standard possession order, they can instruct bailiffs to repossess your property. You will receive a letter informing you of the date and time of the eviction.
It’s important to act quickly if you receive a repossession letter. Here are the steps you should take:
- Contact your lender: Don’t ignore the letter. Contact your lender as soon as possible to discuss your options. They may be willing to work with you to find a solution, such as a repayment plan or a mortgage modification.
- Seek free debt advice: There are free debt advice services available in the UK that can provide you with support and guidance. They can help you understand your options and negotiate with your lender.
- Sell your property yourself: You may be able to avoid repossession by selling your property yourself. This can give you more control over the sale process and potentially allow you to repay some or all of your mortgage debt.
- Consider bankruptcy: Bankruptcy is a last resort, but it can be an option if you are unable to repay your debts.
If you are facing home repossession, there are organisations that can help. Here are a few resources:
- National Debtline: 0808 808 4444 (https://nationaldebtline.org/linking-to-us/)
- StepChange Debt Charity: 0800 138 1111 (https://www.stepchange.org/)
- Shelter: https://www.shelter.org.uk/
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