Response to Arrears now paid - what next?

Dear Tina,

You may have already received legal advice on your question, however, in case you had not I thought I would provide an answer to your question from the perspective of someone who represents mortgage companies on a daily basis in possession claims.

The position where an account falls into arrears is that generally under the mortgage contract the lender is entitled to issue possession proceedings against the borrower. If by the hearing date the borrower has cleared their arrears or reduced them to an acceptable level the proper course is for the matter to be "adjourned generally with liberty to restore" - Halifax v Taffs (Court of Appeal, Civil Division) (Unreported) 2nd February 1999.

Where a District Judge adjourns a matter generally with liberty to restore he will also usually include a date at which the proceedings will be struck out (i.e. cancelled) if a request to restore is not received within that period (usually six to twelve months). The reason for including such a date is so as to avoid the Court Files being inundated with thousands of possession cases adjourned indefinitely.

The effect of a general adjournment is that if the borrower does fall into arrears on their account again within the aforementioned period the lender can apply to Court to have the proceedings restored and a new hearing date provided.

This mechanism not only assists the lender in avoiding the inconvenience of issuing new proceedings but also keeps legal costs in the case to a minimum. Under the mortgage contract the borrower is usually made liable to pay any legal costs incurred as a result of their default and therefore all of the costs of the proceedings will be added to your account. Therefore, if every case was cancelled after a borrower cleared the arrears then if they were to default again the costs of issuing another case would have to be paid by the borrower (the Court issue fee alone is £150.00 without even considering the Solicitor's costs of drafting new pleadings etc.) while restoring proceedings only involves the cost of writing to Court.

In any event, providing you do not fall into arrears within the period set by the Court the proceedings will be struck out after that time period has elapsed.

I hope this is of some assistance.

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