repaying negative equity

venturer01 wrote: »

Hi Everyone,
In 1999 our home was repossessed and sold for £19,500 less than what we paid for it. We heard nothing from the Building Society until a letter arrived today...8yrs later...from a solicitor saying we had to pay the above amount within 7 days or we would be taken to court. We cannot repay this money as neither my husband or myself work...he is disabled and I am his carer. Please can someone advise what we should do.

Thanx

You need legal advice, I have no knowledge of this area but a letter out of the blue 8 years later demanding payment sounds a little odd. The first people I would talk to would be the Building Society, depending on that conversation talk to the CAB or soliceters.

I think these people are trying it on - I think this is what happens:

After six years (of not trying) the bank can't chase you anymore for the debt, so they sell it on to a collection agency for buttons. The collection agency then send out stiffly worded letters insisting you pay up or "we'll 'ave you!" You get scared & fork out some or all of the money.

So...
if you have a solicitor, especially someone who you trust & won't charge too much? Go to them first.
Or failing that try these people: http://www.lawcentres.org.uk/
Or these people: http://www.clsdirect.org.uk/index.jsp
Finally try the CAB: http://www.citizensadvice.org.uk/

Avoid contact with the debt collection agency until you have spoken with a lawyer or the CAB.

Good luck & keep us informed - we appreciate it.

tincat wrote: »

Hi - that sounds v. scary. Do you have assets that they can attach? If so I would go see your CAB and / or a solicitor.

If not, write them a polite letter saying that you are unable to pay the amount because of your situation, and that you will be able to afford £20 per month (or whatever). I think the CAB would help here too.

I think as you do owe the money you will need to make some attempt to paying it back, but they can't make you starve or get blood out of a stone.

Good luck

Hi

Do NOT do this you will simply acknowlege the debt. FSA rules say debt cannot be chased if over 6 years.

See previous posts and links for more info before you proceed further.

Hi

Will provide link later but this is Council for Mortgage Lenders:



How long after my property is taken into possession can a lender pursue me for a shortfall debt?

In England, Wales and Northern Ireland, a lender legally has 12 years in which to contact the borrower to begin the process of obtaining repayment of shortfall debt; this period is usually 5 years in Scotland.

From 11 February 2000, lenders who are members of the CML have agreed voluntarily that they will not pursue a shortfall debt following a mortgage possession if they have not managed to contact the borrower within a period of six years from the date a property was taken into possession.

For more information on the voluntary agreement please see the consumer guide on Debt following mortgage possession.

Residential mortgages sold after the 31 October 2004 are regulated by the Financial Services Authority (FSA). The mortgages conduct of business (MCOB) regulations follow the standard set by the CML voluntary agreement, requiring lenders to begin proceedings to collect a shortfall debt within a period of six years.
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© Council of Mortgage Lenders 2006

How did the negative equity arise? Haven't house prices been rising steadily for the past 10+ years.