The government restrictions on enforcement options for Lenders have been regularly extended due to the ongoing pandemic. Below is a table of what options are available to Lenders as at 22 March 2021 to enforce their security and recover liabilities owing from their borrowers.
TYPE OF ACTION
|Mortgage possession proceedings||Lenders are allowed to issue and pursue mortgage possession proceedings to obtain a possession order.|
|Evictions||There is a ban on residential evictions preventing enforcement of a possession order. Attendance by a bailiff at a residential property for the purpose of executing a writ or warrant of possession, or delivering a notice of eviction is banned until 31 May 2021, subject to certain limited exemptions. Current FCA guidance also prohibits regulated lenders from enforcing possession orders before 1 April 2021.|
|Residential Tenant Possession Proceedings||Possession proceedings can be commenced and pursued however the period of notice required under sections 8 and 21 of the Housing Act 1988 has been extended to six months save for in exceptional circumstances.
The same restrictions on evictions apply.
|Receivership||Lenders may appoint receivers subject to the terms of their security.|
|Administration||Lenders may appoint administrators subject to the terms of their security.|
|Liquidation||No winding up petition may be presented on the basis of a statutory demand served after 1 March 2020 or any of the other usual grounds for proving that a company cannot pay its debts, unless the creditor has reasonable grounds to believe that:
This restriction on winding up petitions is in place until 30 June 2021 and may be further extended.
|Bankruptcy||Statutory demands and bankruptcy petitions may be presented as usual against individual borrowers and personal guarantors.
However from 4 May 2021 The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 commence and:
|Part A1 Moratorium||CIGA 2020 introduced the ‘Part A1 Moratorium’ into the Insolvency Act 1986, which provides a payment holiday for certain pre-moratorium debts. In respect of debts owing to Lenders:
If a borrower fails to pay pursuant to the terms of its facility, a Lender may still accelerate the debt or make a demand for repayment under an on-demand facility.
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