Stages of Repossession in Scotland

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Stages of Repossession in Scotland

Changes to the law
The procedures that mortgage lenders have to follow to repossess your home were changed in October 2010. Unless mentioned the content on this page reflects these changes.
What is repossession?
If you fail to keep up with the repayments on your mortgage or a secured loan, your lender can take legal action against you to repossess and sell your home in order to recover the money owed. Even if you keep up to date with your mortgage, you could lose your home if you fall behind with payments to your secured loan. However, your lender can't just throw you out - they have to follow the correct procedures and get a court order stating that you have to leave the property.
If you are having difficulty paying your mortgage there are options open to you to help you avoid repossession - read the section on mortgage arrears to find out more.
I have received a letter from my mortgage lender
If you have missed a mortgage or loan payment, you will probably receive a letter from your lender. It is likely that the letter will ask you to either bring the payments up to date or to contact your lender to discuss any difficulties that you might be having meeting your repayments.
At this stage you should contact your lender to discuss your situation and talk about what your options might be, for example, coming to a repayment arrangement or re-arranging your mortgage to make it possible for you to clear your arrears and keep on top of future payments. An adviser at one of the agencies listed above can help you come up with a plan.
Your mortgage lender must treat your situation sympathetically and positively, and should listen to any suggestions you have.
See 'arrears on secured loans and second mortgages' at the bottom of this page for more on arrears to non-mortgage loans.
I have received a second letter from my mortgage lender
If you have already had one letter from your lender, which you have not responded to, it is likely that you will receive a second letter. This could come from your lender or from their solicitor. This letter is likely to ask you to bring your payments up to date within seven days or your lender will commence repossession proceedings.
You should contact your lender or your lender's solicitor if the letter came from them. Explain your situation and propose an arrangement to repay the arrears. Again, an adviser can help you with this.
Notices from the mortgage lender
If you have received two letters from your lender and have not contacted them or reached a satisfactory arrangement with them, your lender has three options that they can follow:
· serve you with a notice of default
· serve you with a calling up notice
· serve you with a section 24 notice.
In some cases, your lender may send you a combination of these notices. Where your lender is seeking to repossess your home they must serve you with a calling-up notice.
Applying for a Section 2 order
If you lender started court action before the 30 September 2010 then you can apply for a section 2 order, If this is granted:
· you will be given the opportunity to pay back your arrears and remain in the property, or
· your lender will be allowed to repossess the home, but you will be given time to find alternative accommodation.
What happens once a notice expires?
When a calling up notice or default notice expires and you have not come to a repayment arrangement to clear your arrears, your lender will have to apply to the sheriff court for an order stating that they have that right to sell your property. Your lender cannot sell the property with you in it and will probably also ask the court for an order stating that you must leave. This is called an ejection order or warrant of ejection.
If your lender is going to court you will be sent:
· a section 24 notice warning you that your lender is applying for the right to sell the property, and
· an initial writ - a notice telling you that the lender has made the application to the court.
Even at this stage, you can keep trying to negotiate a repayment arrangement. If possible, continue to make payments towards the arrears, as this will be taken into account if you have to go to court.
Pre-action requirements
Before a lender can apply to the sheriff court they will have to complete the pre-action requirements. This means that they must give you clear information about the terms of your lending agreement; such as the amount that you owe including any arrears. Your lender must also take reasonable steps to avoid repossession by agreeing with you arrangements for future payments under the lending agreement.
Your lender should not take you to court where you are taking reasonable steps to stick to the lending agreement. Your lender must also give you information on how to get advice on managing your debts and persuade you to contact your local authority.
Going to court
If you have to go to court, you will need help from a solicitor. You may be entitled to legal aid if you have a low income or are receiving welfare benefits. An approved lay representative may be able to help you if you do not qualify for legal aid.
The court will make a decision about whether you should be allowed to stay in the property or not.
Ejection order
If the court decides that you will have to leave the property, they will grant an ejection order. You will be sent a letter telling you that you have to move out before a certain date. If you do not move out before the date you are given, sheriff officers can remove you from the property and change the locks so that you cannot return.
Minute of recall
If you did not attend or you were not represented at court when your lender was granted an ejection order, then you can apply for a minute of recall, which will bring your case back to the sheriff court to be heard again.
Arrears on secured loans and second mortgages
If you fall behind with payments to a secured loan or second mortgage your lender can take action to repossess your property. If your loan is regulated by the Consumer Credit Act, you will be sent a default notice telling you that you are behind with your payments, and you may be able to apply to the court for a time order to give you an opportunity to pay back your loan. If your loan is not covered by the Consumer Credit Act, your lender must follow the standard repossession procedure set out on this page.
I was trying to find a way to stop repossession, I know Scottish laws are different to England.