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Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Repossession process on unregulated bridging loan

Customer Question

I wondered if you might be able to help me understanding the court action and repossession timeline for an unregulated second charge bridging loan. The loan is for £83,000 with approx. £5,000 in arrears. My house went under offer a few weeks ago and is working towards quick exchange and completion. After paying my mortgage and the bridging loan remaining equity is more than £300,000. My lender is threatening legal action and obviously I want time to allow exchange and completion. What is likely timely on getting to court and then the judge issuing a repossession order? I understand with mortgage there would be a good chance the judge would grant a suspended order to allow me to stay in the house and finalise the sale. Likely to be different with a non-regulated loan? Any advice much appreciated.


EDIT the bridge loan agreement runs until early August.  Having just recent correspondence again the letter talks about taking steps to recover the arrears.   Wondering if this means that as the principal is not yet due they could not get a repossession order just for the arrears? 

Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts : Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply, but rest assured I will be giving your question my immediate attention upon return You do not need to wait here as you will get an email when I reply.
Alex Watts : What stage are proceedings at the moment please?
JACUSTOMER-11auof84- :

My mortgage provider has said that unless I reduce the arrears to less than 3 months by end of next week then they will instruct solicitors. My bridge provider has just sent me a letter saying they will consider taking steps to recover the arrears in the next week or so - still vague what they mean by this. My main concern is how quickly they would be able to obtain a possession order given the stage of my sale and that it is an unregulated loan.

JACUSTOMER-11auof84- :

Also of course given the principal is not due until early August although I have defaulted in terms of not paying interest.

Alex Watts : Ok. They have to send a letter before action.
Alex Watts : Then they have to wait 28 days and then issue proceedings.
Alex Watts : The court notifies you of the proceedings and gives you 28 days to respond.
Alex Watts : U
Alex Watts : you can file a defence.
Alex Watts : Then even if you lose at court, the court can give possession up to 42 days.
Alex Watts : Even once that has expired they need to apply for a warrant of possession.
Alex Watts : That can take another 4-6 weeks.
Alex Watts : So all in a
Alex Watts : So all in all you can drag it out by a few months.
Alex Watts : Can I clarify Ny
Alex Watts : Can I clarify anything for you about this today please?
JACUSTOMER-11auof84- :

That's great. Just to clarify this all applies even to unregulated loan? It sounds quite similar to a regulated loan. Any bid difference? Also one final thing in terms of defence I understand that if a regulated loan the fact that the house is on the market or under offer - ie that making an active effort to sell - could help in making a possession order suspended for a few months but is that also likely in the case of a unregulated loan?

JACUSTOMER-11auof84- :

I meant big rather than bid.

Alex Watts : Yes it still takes so,e time.
Alex Watts : The judge could suspend the order if he considered there a real prospect to pay the arrears.
Alex Watts : Its a
Alex Watts : it's all a matter of discretion but the discretion is more limited for unregulated.
Alex Watts : Can I clarify anything else please?
Alex Watts :

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