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House Repossession: What Happens After?

21 February 2019 - Posted by TalkAboutDebt

After your house has been repossessed, you may still have a debt to pay regarding your mortgage (known as Shortfall debt).  This article explains how to deal with house repossession and the impact your credit ratings. 

You may also want to read our article on how to stop repossession for more information.

 

Will repossession show on my credit file?

 

Repossession would still show on your credit file for at least six years. Similarly, houses do not have a credit history or rating and on checking your file, with one of the credit reference agencies, you should find that it shows details of how you have managed your credit commitments and any joint commitments. It could be that over a period of time you may have had a credit history at several addresses. There is a lot of useful information about credit ratings on the Money Advice Service website.

In 2010 the register of repossessions was closed.

 

Can I get a mortgage after repossession?

 

You may find it difficult to get a new mortgage because you are obliged to tell the new lender that your previous home was repossessed.  You will also find it more difficult in the 6 years following the repayment of the debt. As the default will be on your credit record for this length of time. It will be the same if you go bankrupt following the repossession. Your previous lender might obtain a charging order on your new property if there is a mortgage shortfall remaining.

 

Can I get a mortgage after spouse’s house repossession?

 

There are many factors considered when a lender is considering a mortgage application. It would be impossible to give a certain answer. A lender would take a lot of information during the application process. They would make their decision based on many different factors. However, there are a couple of points that can be considered here:

  • Your spouse’s previous credit history may have an impact on future credit applications that he makes and if you are not linked financially then this information will not show up on your credit reference agency files. If you have a joint bank account, loan, or other financial crossovers then it may be that an application you make may highlight this to the lender.
  • There are individuals who have mortgages in their name only and there also joint mortgage applications. A lender will ask for information about the household, or other people in the household, to assess the application, check affordability, to decide whether they are willing to lend. It will always be a lenders decision about the information they require in order to make an informed decision.

You may need to speak to a mortgage advisor. They can look at your case in more detail and fully answer your questions.

 

Can my home get repossessed after a charging order?

 

A charging order is normally given to anyone who in serious debt. One option your creditor has to get their money back is to go to court and get a charging order. A charging order secures your debt against your property, meaning if you can’t repay what you own you will lose your home.

A charging order can be repaid in two ways; you sell your house and the charging order is paid from any equity, or you make monthly payments and clear the debt. Therefore, if you move house any equity left after your mortgage is repaid will first go towards repaying the charging order.

 

I own multiple properties, if one gets repossessed will the others?

 

If your property gets repossessed you will be liable for any shortfall in the mortgage. Should you be unable to afford this shortfall, you may be forced to go bankrupt. If you do go bankrupt any other property that you are currently living in or own will form part of the bankruptcy estate and the Official Receiver may have an interest in this, particularly if there is significant equity in it.

 

Can bailiffs break into my house after repossession?

 

Once the court has decided that your home can be repossessed the court does not automatically send a bailiff. Your mortgage lender is able to apply to the court for a ‘warrant of possession’ which will allow a bailiff to remove you from the property. Unfortunately, the bailiffs will have the power and right to force entry and evict you. To suspend a warrant of possession or get it set aside you would need to fill in an N244 form to request a hearing at the court. Please read our article on dealing with bailiffs for more information.

A repossession, or eviction, can often be stopped but you will need to take action quickly. It would be best to speak to a solicitor or legal adviser who is a specialist in housing law. You might also want to contact your local council for further re-housing advice.

You may also want to read our article on voluntary repossession.

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