What is a time order for mortgage arrears?

A time order is a way of asking the court to give you more time to pay if you have fallen behind with the payments on your mortgage or secured loan¹. It is not a separate deal you negotiate with your lender. It is a court order that can change the amount you have to pay each month, how long the loan will last and, in some cases, the interest rate².

The order exists because lenders often want arrears cleared quickly. Lenders will sometimes ask you to pay off the arrears over 12 to 24 months³. If that is not affordable, a time order lets a court set a longer, more manageable schedule instead. The court can amend aspects of the agreement such as how long a consumer has to repay the agreement, the instalment amount and the rate of interest⁴.

You cannot usually apply for a time order unless the lender takes court action to repossess your property¹. That means it is most often used once a lender has started possession proceedings, and it sits alongside the other protections in the repossession process. This page explains when you can ask for one, which mortgages it covers, how to apply, what the court weighs up, and what happens if you fall behind again.

A time order gives you longer to clear mortgage arrears

The problem a time order solves is timing. When you fall behind, the lender's usual approach is to suggest a way to pay off the arrears gradually, alongside your usual payments⁷. In practice that often means a plan of 12 to 24 months³. For someone whose finances have taken a temporary hit, that can be too steep.

A time order asks the court to rewrite the timetable. Under a time order, the court can amend aspects of the agreement such as how long a consumer has to repay the agreement, the instalment amount and the rate of interest⁴. The legislation behind it allows a court to amend a credit agreement which has fallen into arrears to alter the amount of time required to pay back the loan, and amend the agreement in consequence, such as reducing the rate of interest⁸.

That is a wider power than most people expect. It is not just a payment holiday or a short extension. The court can change the shape of the loan itself, including how long it runs and what it costs, if that is what it takes to make the arrangement work.

There is a practical reason this matters. Regulatory reporting data shows that the average amount of time for a customer to be in arrears is approximately 12 months⁹. Someone a year behind on a mortgage is not usually in a position to clear that in a year. A time order is the route that recognises this.

It is worth being clear about what a time order is not. It is not forgiveness of the debt, and it does not write anything off. It reschedules what you owe. The arrears still have to be paid, and the mortgage still has to be repaid.

When you can ask for a time order

The timing rules are the part most people get wrong. You cannot usually apply for a time order unless the lender takes court action to repossess your property¹. So the order is not a first step when you first miss a payment. It becomes available once the lender has escalated to court.

That said, there are related routes in different parts of the UK and for different types of debt. In Scotland, once the formal process of diligence has begun, in other words once a charge for payment or a bank arrestment has been served on you, you may be able to ask the court for time to pay using a time to pay order¹⁰. The rules are also different for rent or mortgage arrears debt¹¹.

The court may be willing to make a time order for a specific period if you have temporary financial difficulties⁵. That word "temporary" matters. A time order is designed for a situation that can be fixed, such as a period out of work, an illness or a relationship breakdown, rather than a permanent shortfall.

The legal basis is the Consumer Credit Act 1974⁵. You may be able to apply for a time order if your credit agreement is regulated by the Consumer Credit Act 1974¹². You can apply to the court for a time order if the debt is regulated by the Consumer Credit Act 1974, giving you more time to pay¹³.

Mortgages a time order can and cannot cover

A time order applies to credit agreements regulated by the Consumer Credit Act 1974⁵. For mortgages, that generally means the agreement has to fall within the regulated framework. The order can cover the full amount owing on the agreement, not just the arrears, in the case of regulated hire-purchase or regulated conditional-sale agreements¹⁴.

The court's powers are broad. It can change the amount you have to pay each month, how long the loan will last and, in some cases, the interest rate². In one case, the court agreed that the whole amount of money owing on the agreement could be included in a time order, and the monthly instalments and the interest rate on the loan agreement can be reduced if the court thinks it is just and needed to make the time order work¹⁵.

There are limits. A time order is not available for every kind of debt. You cannot apply for a time to pay order for debts relating to awards in connection with divorce actions, maintenance orders made by a court, or arrears of income tax, VAT or car tax¹⁶. Those exclusions apply to the Scottish time to pay order, and they show the kind of debt the courts will not reschedule.

Some other support does not help with arrears at all. Support for Mortgage Interest cannot help you pay for any missed mortgage payments, called mortgage arrears¹⁷. That is a separate scheme with a different purpose, and it is not a substitute for a time order.

Lifetime mortgages sit outside the ordinary repayment model. In one case, although interest payments and partial repayment of the capital may become due, no full repayment of the capital is due or capable of becoming due¹⁸. In another, although interest payments may become due, no full or partial repayment of the capital is due or capable of becoming due¹⁸. A time order is built around a loan that has a repayment schedule, so these products behave differently.

How to apply for a time order

There are two routes, depending on whether the lender has already gone to court.

If court action has not started, you apply using a claim form. To apply for a time order, you need to start a claim using a claim form called an N440, which you have to fill in with supporting information called the particulars of claim¹⁹. You must write to your creditor and give them 14 days notice that you are going to apply for a time order¹⁹. There is a fee to pay when you apply for a time order before court action¹⁹.

If the lender has already taken you to court, the route is different. You can apply for a time order after your creditor has taken you to court by using a general court application form called an N244¹⁹. There is a fee to pay when you apply for a time order¹⁵.

The application goes to the right court for your nation. The debtor or hirer may apply under section 129 of the Act for a time order to the county court in England and Wales, the sheriff court in Scotland, or the High Court or the county court in Northern Ireland²⁰.

The process does not have to be handled alone. Before the court date, the lender can be contacted directly or through an advice worker or a solicitor⁶. At the hearing, the person attending, whether that is the borrower, a solicitor, barrister or advice worker, is expected to provide an explanation about why the mortgage payments are behind, details of financial and other relevant circumstances, and a realistic proposal to sort out the situation⁶.

What the court looks at before granting one

The court is not deciding whether you deserve help. It is deciding whether the arrangement you propose is realistic and fair. The court will consider your financial situation, any other debts you have, how reasonable your payment offer is, and if it would be unreasonable for the creditor to refuse your offer¹¹.

That last point is important. The court can make an order even if the lender objects, if refusing would be unreasonable. The lender does not have the final say.

There is also a separate power the court can use. Under the Administration of Justice Act 1970, section 36, a court has power to delay giving a mortgagee possession of the mortgaged property so as to allow the mortgagor a reasonable time to pay any sums due under the mortgage²². And under the Administration of Justice Act 1973, section 8(1), a court may treat as due under the mortgage only such amounts as the mortgagor would have expected to be required to pay if there had been no provision for earlier payment²². In plain terms, the court can look at your normal instalment rather than the whole outstanding balance when deciding what you can reasonably pay.

If your lender has not started court action yet they must look at your offer²³. That is a pre-action requirement, and it means your proposal should be on the table before any hearing.

The judge can also delay a decision, also called adjourning a case²⁴. They can do this to give you time to get advice, sort out benefits or payment problems or because they want more information²⁴. If you have mortgage arrears, you may have to pay a certain amount each week or month as a condition of the case being adjourned²⁵.

Time order or other options for arrears

A time order is one option among several. It is worth knowing what the others are, because a time order is a court process and some alternatives are simpler.

Some of these depend on the lender agreeing. Most lenders will usually expect you to meet your regular mortgage repayments for at least six months before they will agree to capitalise arrears²⁷. Some lenders will refuse to allow you to pay interest only if your mortgage is already in arrears²⁷.

There is also the Mortgage Charter. Lenders signed up to it can extend their mortgage term to reduce their monthly payments and give customers the option to revert to their original term within 6 months by contacting their lender²⁸. That option is for customers who are up to date with their payments, on a one-off basis²⁸.

Paying your mortgage is always a priority payment, meaning these payments come before other debts like loans and credit cards²⁶. Mortgage arrears is a priority debt, and if you consistently fail to repay your mortgage your home could be repossessed²⁹.

What happens if you miss payments under a time order

A time order only works if you keep to it. If you fall behind on the payments set by the order, the protection it gives you falls away, and the lender can go back to court.

The rules on missed payments are strict. The lender usually has to send you an arrears notice if you have missed two or more payments². Your creditor must send you an arrears notice if you have missed two payments and owe at least that amount on your agreement². If the payment is made weekly, your creditor must send the arrears notice if you have missed four payments and owe at least this amount on your agreement².

There are also conduct rules that protect you while you are in arrears. Lenders must treat you fairly, not charge a higher interest rate if you have missed a payment, not harass you about money if you are in arrears, and only contact you between 9am and 8pm³⁰.

If you are in a court arrangement and pay late, the consequences can be quick. If you pay late, your council or housing association could ask the court for a possession order and there would be another possession hearing³¹. The same principle applies to a mortgage arrangement: breaching the terms puts you back in front of a judge.

Missed payments will usually be treated as arrears and interest may continue to be added³². So falling behind under a time order does not just risk the order, it can increase what you owe.

Will a time order affect my credit record?

This is one of the more reassuring parts of the process. If the court makes a time order and you keep up to date with the payments, your creditor cannot apply for a county court judgment to be made¹⁹. That means a judgment will not appear on the Register of Judgments, Orders and Fines or on credit reference agency files¹⁵.

So a time order that you keep to does not itself create a county court judgment. The arrears that led to it may still be recorded by your lender, and the missed payments that caused the problem will already be on your file. But the order is not an additional black mark in the way a judgment would be.

For comparison, other debt solutions do leave a longer mark. An administration order appears for six years on your credit file and the public Register of Judgments³³. It is harder to take out credit during this time³³. A time order is a narrower, more targeted arrangement.

If you are worried about your credit file, it is worth asking a free advice agency to look at your situation before you decide which route to take.

Where to get free help with mortgage arrears

You do not have to work this out on your own, and the help is free.

When faced with repossession, contact your solicitor or a free advice agency⁶. Getting your adviser's help to prepare a budget of your income and outgoings is also part of the process⁶. That budget is what the court will look at, so it needs to be accurate.

If you are behind with your mortgage payments, the lender may arrange a forbearance agreement with you, which allows you to repay any missed payments³⁴. That is worth asking about before court action starts.

There are also in-court services. At some sheriff courts there are free advice and mediation services for issues such as rent arrears, debt and compensation³⁵. In Scotland, the Home Owners Support Fund may be available where your bank or mortgage lender wants to begin repossession proceedings in court³⁶.

If you think your lender has not followed the rules, you can complain. The Financial Ombudsman Service expects lenders to waive arrears fees during a period of difficulty, as long as the customer keeps to any reduced payment arrangement³⁷. It also expects lenders to allow a customer to change the date of their monthly mortgage payment when they move to a new job with a changed salary payment date³⁷.

The ombudsman is free and independent. If a lender has treated you unfairly, that is a route worth knowing about.