First Time Order in Northern Ireland

Housing professionals will be only too aware of the increase in the number of applications for possession of residential dwellings.  What many are less aware of is how useful an application for a Time Order can be to homeowners who risk losing their homes due to a secured loan or second charge.

Scope of a Time Order

If a secured loan is regulated by the Consumer Credit Act 1974, sections 129 and 136 of the Act permit the court to make a Time Order if is “just” to do so.

The scope of a Time Order is wide.  The court may

• amend the loan agreement,
• extend the term or
• alter the rate of interest.

Housing Rights Service secured the first Time Order in Northern Ireland

The client in our first successful Time Order case, Mr McC, borrowed £9,000 but lost his job in the economic downturn. He was unable to maintain regular payments but paid what he could. Although almost half of the original loan had been paid, he still owed a balance of £18,000 once fees, interest and were added.

Mr McC contacted the lender to ask that interest be frozen or the loan be extended, but they did not reply to his request and initiated possession proceedings. Mr McC had become depressed as a result of frequent phone calls and was admitted to hospital. As part of our casework with Mr McC, Housing Rights Service applied to the Court for a Time Order which was eventually granted by the Master.

Master’s considerations in the case

In granting a Time Order the Master considered all of the circumstances of the case and referred to guidance set out in Southern and District Finance v Barnes. 

He took the following facts into consideration

• the loan was for the relatively low sum of £9,000,
• the borrower had lost his job,
• been seriously ill,
• there was nothing to suggest that failing to repay was Mr McC’s fault or that his intentions were not honourable or realistic and
• the lender would have received no financial benefit from selling the property as the property was in negative equity

The Master stated that the lender had no “viable recourse as an unsecured creditor against a defendant who is wholly dependent on state benefits”.

The Time Order made in the case

• amended the regulated agreement,
• reduced the monthly interest and instalment and
• extended the term, which made the payments affordable.

This avoided the likelihood of there being an outstanding balance when the loan period expired.  The full text of the Master’s judgment is available on the Courts NI website.

Find out how our adviser helps a client avoid the pitfalls of second charge borrowing.