Getting a court summons (officially called a “Civil Bill for Possession”) can be a very frightening experience for borrowers in mortgage arrears. What does everything in the letter mean? Will I lose my home?
A court summons does not mean the process is over; it can be the beginning of a positive journey to keeping your family home. It gives someone in mortgage arrears time and focus to get the proper help and support. Below are 5 of borrowers’ most commonly asked questions when receiving a repossession court summons.
Should I attend my court summons for repossession?
Yes – it is extremely important to your case that you attend all possession hearings. If there is more than one name on the mortgage, it’s not necessary that you both show up, but a lot of couples/separated couples (on good terms) will often attend together for support.
The first possession hearing will usually be adjourned (known as a practice adjournment). This means it will be postponed until a later date, which can be a few months down the line. During this time, the borrower should engage with the lender to try to reach an arrangement. The County Registrar, who is the Court Official hearing the case, will be aware of and direct borrowers to MABS to assist with this process.
When a borrower is referred to contact MABS, their situation is assessed, and they work with a dedicated adviser. Depending on their case, this could be a Money Adviser or a Dedicated Mortgage Arrears (DMA) Adviser from MABS. MABS may refer them externally to a Personal Insolvency Practitioner (PIP) or an Abhaile Accountant if eligible.
Are there free legal and professional supports at the repossession courts?
Yes – two court-based supports available at the repossession courts: the Abhaile Duty Solicitor from the Legal Aid Board, and a Court Mentor from MABS. The Court Mentor is there to explain what’s happening in the court, give advice and answer any questions a borrower may have. The Duty Solicitor can help the borrower prepare what they are going to say to the County Registrar, or at times they can speak on behalf of the borrower (this is at the discretion of the individual County Registrar).
It helps if the borrower has engaged with Abhaile before they attend the repossession hearing, but the two services are available to everyone in the County Registrar’s court. The Duty Solicitor may still be able to give some limited help at Court, but only if borrowers have already talked to MABS – i.e. the Court Mentor, a Dedicated Adviser or the MABS Helpline.
In addition to the above court-based supports, the borrower can access a Consultation Solicitor for free through Abhaile if the case raises legal issues or the borrower has received repossession proceedings. To work with a Consultation Solicitor, the borrower will need to be already working with the following:
- a MABS Adviser or
- with a PIP and
- have completed a MARP Standard Financial Statement (MARP SFS) with MABS or a Prescribed Financial Statement (PFS) with a PIP.
Am I liable for legal fees from my lender?
The Central Bank is of the view that the application of legal costs prior to the conclusion of repossession proceedings and prior to the decision by a Court to award the costs associated with the legal process to the lender is not in borrowers’ best interests. It is, therefore, not in accordance with the Consumer Protection Code 2012. For clarity, lenders must not apply the costs to a mortgage account until:
a. the Court has awarded the costs to the regulated entity (lender);
b. a settlement has been agreed between the parties; or
c. the borrower is in a position to redeem the mortgage and has requested to do so.
Engagement also ensures a borrower is protected by the Land and Conveyancing Law Reform (Amendment) Act 2019. The Act requires lenders to examine a borrower’s circumstances before they can look at issuing a repossession order. However, the Act only applies in certain circumstances, including if a borrower has engaged with:
- Abhaile or
- Mortgage to rent or
- In the personal insolvency process.
If a borrower has not been engaging in the Mortgage Arrears Resolution Process (MARP) with their lender, they are at a higher risk of losing their home.
Do Credit Servicing Firms (sometimes referred to as a “vulture fund”) operate in the same courts as the banks?
Yes – the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 provides for the regulation of credit servicing firms by the Central Bank, so they are subject to the same laws and regulations as domestic banks. This means borrowers have the same protections and rights regardless of who owns their mortgage account. This is set out in a framework known as MARP (see above) on how borrowers should be treated and the structure by which the lender must communicate with them.
The insolvency legislation ensures that no distinctions are made in regard to mortgage loan owners. All cases are to be dealt with in the same manner, whether it is a domestic lender or credit servicing firm. These same protections and supports apply to the profile of a borrower or their case. Everyone must be treated the same.
How long does a possession court order last?
A possession order remains in force for a period of 12 years from the date it was granted. An execution order is required to complete the repossession and may be issued in the Court Office within this period. However, if six years have passed from the date the possession order was granted, the mortgage lender needs to get the permission of the Court to get another execution order. To do so, the mortgage lender needs to:
- give prior notice of this to the borrower,
- attend a hearing in the Court and
- make an application for the execution order by putting a motion to the Court and
- giving prior notice of this motion to the borrower.
Even in cases when the sheriff has been involved, the regulated and qualified professionals of the Abhaile scheme have been able to achieve arrangements that have kept borrowers in their homes. The key thing to remember is it’s never too late – but the sooner you engage, the better the outcome can be for you and your home.
If you are in mortgage arrears and fear you are at risk of losing your home, you can contact your local office here, call the MABS Helpline on 0818 07 2000, Monday to Friday, from 9am to 8pm, or message us on WhatsApp 086 035 3141.
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Disclaimer: This blog does not represent legal advice and is intended for guidance only. If you are concerned about your current or future personal financial situation, then please contact an adviser from MABS. Advisers are available by phone, email, WhatsApp and in-person in locations nationwide.