A letter before action for arrears is a formal letter that requests the payment of the arrears outstanding on your mortgage account. It sets out what is owed and provides a set time period, usually 15 working days from the date of the letter in which to pay. This is an essential requirement of the debt recovery process.

A letter before action for full balance is a formal letter that requests payment of the full balance, this is usually used in the circumstances of a deceased borrower when the whole monies become due under the terms and conditions. It sets out what is owed and provides a set time period, usually 15 working days from the date of the letter in which to pay. This is an essential requirement of the debt recovery process.

A final notice will be issued which “calls up” the full balance of your mortgage account. This is generally used when the mortgage account has reached the end of its term and there is a balance remaining. The notice is sent prior to any formal litigation action and essentially allows a three month period, however this can vary depending on the terms and conditions. The time period provides time for you to engage with your lender or the firm of solicitors to address the full balance which has become due. The final notice will be sent to all parties named on the mortgage account.

Once the time frames stated in the letter have expired it is at this point the solicitors firm will seek their client’s (your lender’s) instructions regarding litigation action. Should there have been no engagement throughout the time period and the arrears/balance remain outstanding it is likely your lender will commence litigation action through the court by way of possession proceedings.

Possession proceedings involves legal proceedings in which your lender obtains a court order for possession of your property.

Once in receipt of instructions from the client to commence litigation action, the solicitor will send a Claim Form together with a Particulars of Claim to the court issuing possession proceedings. Included in the particulars of claim will be information regarding the arrears/balance on your account. Attached to the claim will also be a statement of account.

Upon the Court receiving the Claim Form for possession proceedings they will issue the possessions proceedings and serve you with a copy of the Claim Form together with the date and time of the court hearing date. You will need to check the Claim Form as it will tell you which court the hearing will take place at, this is usually your local court. You will be given at least 21 days’ notice of the hearing date. Prior to the hearing you will also be served with a witness statement from your lenders Solicitors containing all the information they wish to rely upon at the hearing including up to date figures.

During this time prior to the hearing date you may wish to contact your lender to try and reach a payment arrangement or take some independent advice. Please note your lender does not have to agree a payment arrangement with you.

If you have cleared the arrears or balance prior to the court hearing once the payment has cleared the lenders solicitors will notify the court and the proceedings will be postponed generally with the option to bring back. If you fail to maintain payments and the account falls back into arrears proceedings can be reinstated and a further hearing date will be set.

If you agree a payment arrangement with the lender prior to the hearing date this will not stop the hearing from taking place. However, the lender will not seek an outright possession order and will look to obtain a suspended possession order instead. This is discussed in more detail below.

Although appearing in court may sound intimidating, it is important that you do attend. You can represent yourself or you can be represented by a legal representative such as a solicitor. Some courts have a representative (often called a Duty Solicitor) who are available to provide help and advice on the day of your hearing. However, it is not guaranteed a representative will be available on the day of the hearing so we strongly advise you seek independent advice prior to the hearing date.

Your case will be listed to be heard before a District Judge or a Deputy District Judge. Your case may not be heard at your allocated time as there will be other cases listed for the same time and it may depend on where you are on the list on the day so you may have to wait.

The hearing will take place in a room called chambers with the Judge, a representative from your lender, and you and your representative if you choose to be represented.

The Judge will ask your lenders representative to speak and provide a history of the account and they will also provide the Judge with the up to date figures and also what Order they are seeking.

The Judge will then ask you or your representative to speak and provide an explanation/defence for the arrears on the mortgage account. This is also an opportunity for you to make any proposals you wish the Judge to consider when making any Order.

The outcome of the hearing will depend on the information presented to the Judge, and could include any of the following examples :-

• Possession in 28 days.
  This means after 28 days the lender can instruct the solicitors to request a warrant for possession of the property if the arrears/balance remains outstanding.
• Possession forthwith.
  This means the lender can instruct the solicitors to request a warrant for possession of the property immediately.
• Possession suspended upon payment of your contractual monthly instalments (CMI) payment of your mortgage payment plus an additional sum to pay off the arrears each month.
  This means a warrant cannot be requested for possession of the property provided you maintain the payments set out in the Court Order and on time. This is order is usually granted when a payment arrangement has been agreed prior to the hearing date or on the day of the hearing when proposals have been made.
• Hearing adjourned until the next available date after a fixed date in the future
  A further hearing date will be allocated. This often occurs when the Judge believes there is insufficient time to hear the case and a new and longer hearing will need to be scheduled at a future date.
• Dismissed
  The claim can no longer proceed, however the lender could instruct the solicitor to commence new proceedings.

The Judge may also give other directions for the parties to take further steps. This often includes a requirement for the borrower/defendant to file a defence or other documents by a fixed date.

If after the 28 days the arrears/balance remain outstanding or you do not maintain the payments set out in the Order, your lender can instruct the solicitors to issue a warrant for possession of the property.

The warrant request is sent to the court and the bailiff will arrange to provide you with a date and time that they will attend the property and take possession. The bailiff will give you at least 7 days’ notice of the time and date of the eviction.

The solicitors will also receive notice of the date and time of the eviction. The solicitors will instruct a locksmith/asset manager to attend the property at the date and time of the eviction to gain entry to the property and change the locks.

The property will be marketed and sold.

It is very important that you provide the solicitor with your up to date contact details. This will enable the solicitor to notify you once the property has been sold and provide you with a completion statement. There may also be surplus monies due to you following the redemption of the mortgage account.