What happens if a lender takes you to court?
Perhaps you have been missing mortgage payments or not paying the full amounts due, and now you find yourself facing a court summons? Falling into mortgage arrears is never ideal, but it is a reality for over many homeowners in Ireland at the moment. The prospect of defending yourself in court may seem impossible, however, for many homeowners, it can be the beginning of a positive on the resolution process.
Will I lose my home?"The banks are absolutely open to making alternative arrangements regarding repayments. I’ve seen cases where people successfully managed to keep their home even after a repossession order was granted by the court." Michael Laffey - Abhaile Court Mentor
Borrowers in fear of losing their home should make themselves familiar with the legislative protections available to them. Under the Land And Conveyancing Reform Law 2013, for example, the court can postpone repossession proceedings for up to two months, to allow the borrower to explore the possibility of putting in place a PIA - Personal Insolvency Arrangement. A PIA is a court-approved agreement between you and your creditor. It allows for the restructuring and write-off of debt, with the aim of keeping you in your home wherever possible. Borrowers can access the services of a Personal Insolvency Practitioner for free via Abhaile.
Do I need to be present in court?If possible, you should attend court on the date given to ensure that your side of the story is presented. Appearing in court and showing that you have made an effort to meet your repayments are two things that will reflect favourably on you. The first court hearing is usually a practice adjournment, where the case is adjourned for up to six months, but it is still very important that you attend.
Louisa McKeon, of Rhatigan and Co solicitors, who provide free legal guidance through Abhaile says:
"You retain more control that way. In the County Registrar’s court, where cases like this begin, they’ll always ask to meet the debtor. If you’re not there, any inference could be drawn – for example that you’ve left the country or that you’re not willing to co-operate."
Do I need to have a solicitor?There is no real need to have a solicitor unless you believe you've been the victim of serious malpractice or similar. However, you may still choose to engage one. There are Abhaile duty solicitors and court mentors who can offer free support at each Circuit Court sitting. Louisa explains:
"The scheme is designed to take the uncertainty out of the legal process for debtors. It means there’s someone there who is in your corner, who understands the lingo and who can let you know what to expect."
In some courts, the duty solicitor may speak on your behalf if you are unable or too nervous to do so yourself.
What actually happens on the day?Prepare yourself for a long wait. There can be 30 to 40 people on the court list on any one day. The Abhaile court mentors like Patricia and Michael are your first point of contact and are usually there long before the court opens. If you are speaking on your behalf, wait for your number to be called from the list, stand up and state your name, and answer any questions asked of you. As it’s a public courtroom, you can bring family members or friends along for support, but they will not be permitted to speak on your behalf.
The court has issued a repossession order. What do I do? If a resolution has not been reached after repeat hearings, the court may rule in the lender’s favour, permitting them to repossess your house. At that stage, the court may grant a “stay”: this is a grace period allowing you to stay in your home for three to six months before the lender is permitted to take possession of it.
As Patricia notes,
"You can request an extension to that stay, for example if you have a child sitting their Leaving Cert or a newborn baby at home."
After a repossession order is granted, you can still appeal the ruling to a higher court, or make contact with your bank to see if alternative agreements can be reached. “I have seen many positive resolutions,” says Michael. “If you haven’t already done so, contact Abhaile for more advice. The one message we always try to get across to people is that it’s never too late.”
If you are in mortgage arrears or fear you are at risk of losing your home, you may be eligible for free face-to-face financial or legal advice under the Abhaile service. For information, call our dedicated helpline on 0761 07 2000.