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Court action over mortgage arrears

This section describes what happens when a mortgage lender takes action in the courts to repossess a property because of mortgage arrears.

What counts as arrears?

In order to check what sums are in arrears, it is important to request a redemption figure from the lender. 

Undue influence

A defence against repossession of the property may be possible on the ground of 'undue influence'. 

Legislation regulating possession procedures

The procedure followed by lenders when a borrower falls into arrears will depend on which legislation regulates the loan. 

Section 2 orders

If a lender started repossession proceedings before 30 September 2010 the borrower may be able to apply to the court for a section 2 order to suspend the action under the Mortgage Rights (Scotland) Act 2001. 

Final negotiations

This section looks at steps the borrower can take to negotiate with the lender even after the lender has obtained the right to sell the property. 

Eviction after repossession proceedings

Sheriff officers, who will notify the borrower of the date by which s/he must vacate the property, will enforce the decree of ejection. 

After repossession

If a lender has obtained possession, there may still be outstanding issues to consider. This page looks at the borrower's continuing responsibilities to maintain and insure the property. 

Legal expenses

Most standard mortgage agreements contain a clause stating that the borrower will be liable to pay for any expenses that the lender reasonably incurs relating to the mortgage. 

Lender's sale of the property

Once the lender has obtained possession it is likely to proceed to sell the property. There are likely to be outstanding issues to be dealt with at this point. 

Extinction of mortgage debt

If a property is repossessed and sold at a loss, it is possible that the lender will not pursue the borrower for payment of the shortfall immediately, and may wait several years before pursuing her/him. In this case, it is important to be aware of the time limits set out in the Prescription and Limitation (Scotland) Act 1973. 


If a creditor is owed money, s/he may be able to raise a court action to take out an inhibition against the borrower, which will prevent the borrower from selling or transferring ownership of her/his home or taking out any further secured loans on her/his home. 

This content applies to Scotland

Last updated: 31 October 2014