Dealing With Suspended Possession Orders

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I've found out, after the event, that a friend has ended up with an SPO concerning about 800 of arrears. Based on his version of events I'd say his advisors (CAB possibly) rolled over and had their tummy tickled when he went to court.

I'd like to set about getting the order struck out. Everybody I've ever spoken to on this subject has advised against agreeing to an SPO - it means the lender can take you back to court very quickly and repossess if even one payment is missed.

Where do I start? Lender is possibly sub-prime (I can't remember the name).

A.T. ps: greetings to any of the old-timers here, glad to see my story still running on the site.

-- Bluemoon Andy (Rides Again!!!) (cant_give_it@sorry.com), September 22, 2003

Answers

Andy,

Some advice from a solicitor for you.....

There are two ways that the court deals with possession cases - either under s36 AJA 1970 and s8 AJA 1973 or under the Consumer Credit Act 1974.

Cases come under CCA where the loan is 'regulated' by the Act. In a nutshell, house purchase mortgages from banks, building societies and insurance companies are exempt from regulation, as are loans of over 25,000 (15,000 if before 1.5.98). All cases not coming under CCA come under the AJAs.

In AJA cases the court can suspend payment as long as the defendant can pay the contractual instalment and clear the arrears over a 'reasonable period'. What was a 'reasonable period' was disputed for many years until the CA decision in Cheltenham and Gloucester v Norgan [1996] 1 All ER 449 which decided that the starting point for considering what is a 'reasonable period' is the whole remaining period of the loan. If the defendant cannot afford this, the court cannot suspend the PO and must just make a PO.

Unless the defendant says that there were no arrears, an SPO for contractual plus arrears is the normal way that arrears in ALA cases are dealt with.

It is sometimes possible in AJA cases to persuade the lender or the court to adjourn the proceedings on payment of contractual plus arrears but this rarely happens.

If the secured loan is regulated by CCA, the court has similar, but wider, powers under CCA 74, and is not restricted by Norgan. In CCA cases, the court can make a 'time order' (s129) rescheduling payment of the debt(at less than contractual if appropriate), suspend possession (s135) and freeze further interset (s136)if it considers it just' (which means that the interests of both the creditor and debtor must be considered).

If the case was an AJA one, I don't see any basis for criticising a CAB for getting a client an SPO, and no basis for getting it struck out or set aside. Assuming that it is an AJA case, the only options to an SPO are/were:

1. getting claim dismissed where there are no arrears

2. getting the case adjourned on terms (unusual that ct or lender will agree)

3. a straight possession order (with no suspension)

If the case was a CCA one it is possible that the CAB was not aware of the CCA possibilities. The CAB have often had to 'inform' district judges of the AJA/CCA distinctions. What else do you think the CAB should have done ?

The point about the lender being able to 'take you back to court very quickly and repossess if even one payment is missed' is tue to a certain extent. If an SPO is defaulted on, the lender has to apply for a 'warrant of possession' to evict the defendant. This warrant is applied for 'ex parte' (i.e. on paper without the attendance of the parties) but the defendant can apply to have it suspended on terms, e.g. the same terms as the SPO. Also, if the terms of an SPO are, or become, unaffordable, the defendant can apply to vary the terms (although if it is an AJA case the court will be extremely reluctant to extend repayment of arrears beyond Norgan, i.e. beyond the term of the mortgage).

I would be interested to know which lender is involved and the date and the amount of the loan - with some sub-prime type lenders we know that the (CCA) agreements are dodgy and possibly unenforceable due to failure to comply with CCA technicalities and formalities.

Hope this helps

Mark.

-- M Amos (idgroms@hotmail.com), September 23, 2003.


Cheers Mark.

My view - based on my pals comments - is that court could have been avoided - either he didn't act quick enough or the CAB didn't. I'll find out the lender and details requested when I see him this weekend. The sum involved is only about 800 quid.

Thanks

-- Bluemoon (sorry@butcannot.com), September 25, 2003.


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