I’m facing house repossession – what can I do?

If you are threatened with house repossession, you need to act quickly. You may be able to negotiate more time to pay – it is often the case that repossession can be stopped or temporarily halted, also offering you time to obtain professional advice.

You must do all you can to make alternative payment arrangements so that if the case goes to court, the Sheriff will see that you have made every effort to resolve the situation.

The actions available to you depend on how far the court process has gone. Let us look at each stage leading up to repossession, and the possible actions you can take.

Notice of Default

You will have received a Notice of Default if you have missed one or more payments. You have a month in which to do one of the following:

• Repay all amounts outstanding
• Make an alternative repayment arrangement
• Make an application for the Home Owners’ Support Fund

Home Owners’ Support Fund

The Home Owners’ Support Fund is a government-run scheme available to residents in Scotland. There are two options that may help you avoid repossession:

• Mortgage to Rent: this means that your local authority or a housing association will purchase your home and rent it back to you.
• Mortgage to Shared Equity: you must have at least 25% equity in your property to be eligible for this, and have a minimum of three months’ arrears on your mortgage.In this scheme, up to 30% of equity may be purchased by the Scottish Government, with the mortgage repayments being reduced according to the level of equity sold.

If you have been unable to repay your mortgage arrears or negotiate more time to pay, you may receive a ‘Calling Up Notice’ from the lender.

Calling Up Notice

A Calling Up Notice effectively marks the end of your original loan. They should send the notice by recorded delivery, and are also obliged to inform your local council of your situation.

The council may get in touch to offer support and advice – some local councils even offer to intervene depending on the circumstances of the individual.

So what can you do on receipt of a Calling Up Notice?

• You have a time limit of two months in which to repay the loan in full
• You can negotiate with the lender for more time to pay. If an agreement is reached at this stage, the case may still be taken to court so that if you miss any payments under this new arrangement, your creditor can repossess the house quickly
• The two Home Owner Support Fund options described above remain open to you
• Challenge the Calling Up Notice, but only for specific technical reasons, and with the help of a solicitor

If court action proceeds, your creditor will have applied to the court for a Section 24 Notice and an Initial Writ.

Section 24 Notice and Initial Writ

On receipt of these court documents you can defend the action if you reply to the court within 21 days. Disputing the existence or amount of arrears will result in postponement of the repossession so that the lender can provide more evidence.

You could also gain more time if you feel that you can repay the debt in full, but just need a little more time. This is termed ‘asking for the case to be continued.’ The Sheriff may allow this, but if you fail to repay during this extended time period the repossession will go ahead.

You should seek the advice of a professional Insolvency Practitioner at the earliest stage of difficulty. Do not leave it too long, as once you get into mortgage arrears your lender may act quickly to begin repossession.

Scotland Debt Solutions can offer guidance and support. With offices located around Scotland, we provide free personal insolvency advice to Scottish residents in financial difficulties.