Repossession

What is Repossession?

Repossession is the term used when a financial or lending institution repossesses or ‘takes’ the item which was offered as Security on a secured loan in the event of payments entering default.

Commonly this is used to refer to home repossession when a mortgage has gone into default, but other items may also be used for Collateral, such as cars.

If a lender seeks possession of a house, there is a strict protocol set out from guidelines by UK Finance (formerly the Council of Mortgage Lenders/CML), whereby the mortgage provider follows certain steps to try and resolve the issue satisfactorily. If these steps fail, the lender may apply to the Court for a possession order. If this is granted, the lender will repossess the property.


Q: How does repossession appear on my Credit Report?

A: Repossessions, like defaults and CCJs are reported on your Credit Report for six years from the date first reported. Once this period is over, it will automatically be removed from your report, but when applying for credit a lender may ask if you have ever been declared bankrupt or had items repossessed. If this is the case you are legally obliged to answer truthfully, or risk the lender being able to exit the agreement at any time.

To see what is reported on your Credit Report, you can try checkmyfile FREE for 30 days, then for just £14.99 a month afterwards, which you can cancel online at any time.

Q: What happens if your rented property is repossessed?

A: If you have a binding tenancy then the mortgage lender assumes possession of the house and becomes your landlord. If the tenancy isn’t binding then there is a risk of becoming evicted from the property.

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