Economy

I’m in mortgage arrears and due in court: How do I avoid being evicted?

Next week, I will be appearing in court regarding my non-payment of my mortgage. I’ve been unable repay my monthly mortgage payment since losing my job six-months ago. I fear for my family’s safety. 

I have been too afraid to talk about my financial problems with my lender. I have had many sleepless nights and I now face a judge because I can’t agree on a new payment plan. 

What should I tell the court in order to keep my roof over my head as I look for work? AS

Ex-judge Stephen explains that appearing in court could allow you to avoid being evicted. Gold

Myra Butterworth, MailOnline’s property expert, replies to: Sorry to hear about your situation.

Although the thought of appearing in court may be frightening, it could provide you with the opportunity to save your roof. 

There are many options for a judge to support you if your efforts are focused on finding a new job.

We talk to a former Judge about the information you need in court to avoid being evicted from your home and have it repossessed. 

Stephen GoldEx-judge and author, he replies: Although I understand, it is not a good idea to head-bury under the sand when it comes mortgage arrears. Engagement with the lender is crucial when there are difficulties. 

Some lenders are actually kind and caring.

There is more often than not a chance to save your home. Keep in mind, however, that the court decides whether you should leave the home and not the lender. So make sure you are present at the hearing. 

It is best to attend personally so the judge can see how serious you take the situation. You can also speak with the independent expert adviser, who should be available at court. He may be able to accompany and address the judge in your place. 

If you are unable or unwilling to attend the court’s event, contact them in advance so they can allow you to participate via phone or video.

Don’t be afraid to pay the lender anything you can before the hearing. Do not ask the lender for permission and show court written proof that you have paid.

If you are summoned to court, the representative of the lender may ask you to meet with him to discuss your concerns. It’s okay to have a conversation. They don’t usually bite. 

You might be able to find a course that suits. Do not be intimidated. The court will decide, as I mentioned.

If your house is in trouble and you don’t have the funds to pay it, This Is Money has a guide for you.

Those Due To Appear In Court Should Provide Evidence Of How They Intend To Clear Their Debts

Persons who are required to appear in court must provide evidence that they plan to pay off their debts

Money is the one commodity that you need to escape eviction. Money is not always in your control, but it’s in the pipeline. This money is used to pay the mortgage instalments and to clear arrears.

This could be from a new job or your father-in law. Or, it could be from your son about to start earning his own way. 

At trial, have evidence of the source of the money. Ideally, this should be in the form the person who was set to bring it.

The lender might protest to the judge, “Unemployed for six month.” We shouldn’t assume that he won’t remain unemployed for six more years.

You should explain to the judge why your confidence is high. It is a good idea to prepare a CV before you present it to your judge. Do your best to get at least a few job interviews done before the hearing, and give the judge evidence.

The eligibility criteria for the Government support for mortgage interest schemeYou may be eligible for a financial aid award that will help you towards your commitment. If you have not yet made an application, please do so immediately.

While the judge will want to see the arrears paid off, they can allow for the payment of the mortgage until the end of the term (even if it is 25 year)

Stephen, a retired judge Gold

Maybe you are unable to get employment in the sector you worked in previously. If that is the case then you should convince the judge that it is possible to accept work in any sector, even if it means losing your home. You should prepare a budget that covers the worst and best case scenarios. This will help you to show that you can keep current payments and repay the arrears in the timeframe of the mortgage.

While the judge will desire to see arrears paid in full as soon possible, typically by monthly installments, they have the power to grant this right up to the 25-year mark of the mortgage term.

A home valuation by an estate agent or a rough estimate online could prove to be decisive. It could be the difference between staying put and being evicted if the difference in value and what it would cost to repay the mortgage is acceptable. 

If there is sufficient equity in your home, the judge can say: “If I allow the borrower stay and they default again,” because the potential equity will absorb the new arrears.

Allow the judge to see the valuation. If it shows that your interest in the property is actually worth less than a tenner, take it with you on the bus to court.

If the judge finds it justified, he will likely save you from eviction. This applies regardless of whether you have an interest-only or repayment mortgage, or are behind on a first, second, or eleventh mortgage. 

What are the options available? 

The judge will often have the option to save you from being evicted. Here is the order menu from which the judge can pick:

  • Order now to have your order shipped within 28 days
  • If there are exceptional reasons to extend the time, such as selling your home or a change in circumstances, you can be ordered to leave within 28 days.
  • Ordain you to leave, but suspend (paralyze) the possession order so you can remain put for as long you continue to pay the arrears and current instalments

If you convince the judge that there is a reasonable possibility of you securing employment, it is likely that they will adjourn your hearing for at most 28 days in order to allow you to obtain that work and to prove that you are ready to go next time.

They might issue a suspension of possession order if you perform well. In the hope that you get the job, they will also fix the first payment date so it coincides with when you will receive your wages at the bank.

A representative of the lender may argue to the judge that they are not allowed to interfere with your contractual obligation in paying what you agreed to when you took out your mortgage at the dates set. 

Remind the judge, however, that section 36 of 1970’s Administration of Justice Act allows the court to permit monthly instalments to remain unpaid for a specified period if the borrower is unable to repay those amounts within a reasonable time.

A Judge Has The Power To Allow Right Up To The End Of The Mortgage Term, Be It 25 Years Or Whatever, For This To Be Done.

Even though a judge would like to see the arrears paid off they are able to grant permission for the payment to be made up to the end the mortgage term.

The court won’t save you if your lender required you to pay them on demand.

The bright side is that if the second, third, or subsequent mortgage is in arrears, then the court has more power to help you. They can also make a temporary order to address your problems.

These may include reducing your monthly payments, exempting you from paying any arrears for the time being, and even allowing payments to continue after the mortgage term is over. For certain mortgages that were taken out prior to April 6, 2008, these powers may not be available.

Can I still decide to sell the property  

You might have made a reluctant decision that you simply cannot afford the mortgage payment and that the property needs to be sold. It’s better to sell yourself rather than having your lender sell the property – likely at auction and possibly to a bird – after you have been expelled.

You can sell your home at any time before you are evicted. However, the price must be sufficient to repay the mortgage. You do not have to pay the mortgage arrears nor are you subject to a court case.

Although it is not a good idea to share your problems with a potential buyer, they might wait until you are gone to try to buy your house for peanuts. 

Ask the judge for an adjournment of the hearing so you can sell. If you already have the property placed with an estate agent, your chances of getting the judge to agree will increase. 

If the judge refuses to adjourn, they might still allow you to stay longer before you have to move. The court can grant you permission to stop the bailiff from entering the property even if you have not been able to sell the property or your circumstances have improved.

It might be in your best interest to ask for an adjournment at the first hearing. There is nothing to be ashamed of. Some cases may be adjourned by the judge. (For more information, see below).

You can find more information in my book. Best of luck. 

  • Stephen Gold Ex-judge, author of “The Return of Breaking Law”, published by Bath Publishing. Find out more about service charges at www. breakinglaw.co.uk

What is the best time for a judge to adjourn the hearing 

You may be able to request an adjournment for the first hearing due to technical reasons. 

If you ask the judge where to adjourn, the judge may 

  • The lender is not following a protocol prior to starting proceedings (unless it’s a buy-to–let mortgage).
  • You have not received the court papers at least three weeks prior to the hearing
  • The lender does not possess an N123 form that relates to protocol compliance or other documentation the judge will need.
  • You have not received copies of any written evidence the lender relies on at least two days prior to the hearing

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Jacky

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