Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • s1985
    • By s1985 6th Dec 17, 10:05 AM
    • 16Posts
    • 0Thanks
    s1985
    Creditor letter
    • #1
    • 6th Dec 17, 10:05 AM
    Creditor letter 6th Dec 17 at 10:05 AM
    Hi, after numerous back and forth correspondence with a creditor over the last 5 years regarding a mortgage repossession shortfall they have written to me stating they are going to take action in the next 60 days if nothing is sorted with payments.
    One of the options mentioned is to "take legal action to obtain payments direct from your salary" - am I right in thinking this can only happen after a CCJ is obtained, payments are not made and so an attachment of earnings order is granted?

    Second question - I'm in between a rock and a hard place with the shortfall as any insolvency or CCJ, etc is likely to cause me to lose my job as I work in financial services. The creditor doesn't know this currently so is it worth mentioning this to them? I could start making token payments which may or may not stop action for a while but I'm concerned that interest, etc will be added so the shortfall will never actually decrease and so I am just delaying the inevitable.

    Thanks
Page 1
    • zx81
    • By zx81 6th Dec 17, 10:07 AM
    • 14,388 Posts
    • 15,181 Thanks
    zx81
    • #2
    • 6th Dec 17, 10:07 AM
    • #2
    • 6th Dec 17, 10:07 AM
    If your job depends on you not having a CCJ, then a) definitely don't tell them that and b) start making at least token payments.
    • s1985
    • By s1985 6th Dec 17, 10:21 AM
    • 16 Posts
    • 0 Thanks
    s1985
    • #3
    • 6th Dec 17, 10:21 AM
    • #3
    • 6th Dec 17, 10:21 AM
    If your job depends on you not having a CCJ, then a) definitely don't tell them that and b) start making at least token payments.
    Originally posted by zx81
    Cheers, what was your thinking behind answer a) as I was just thinking that this may not make sense to the creditor as with no job I have no money to pay anything. If a CCJ was on the cards I would may as well go bankrupt which would lead to the same outcome but with the debt written off. I have no assets.
  • National Debtline
    • #4
    • 6th Dec 17, 12:31 PM
    • #4
    • 6th Dec 17, 12:31 PM
    Hi s1985


    For the same reasons you give above, I too would suggest that, if anything, it makes more sense for you to make the creditor aware of the adverse effects any CCJ would end up having - both on you and on their ability to recoup any money from you. It wouldn't be rational for them to choose a course of action that would backfire on them.


    First of all, though, I'd suggest that you investigate in more detail exactly what the effects of any court judgment/insolvency would be. "Financial services" is a very broad term and it doesn't automatically follow that no one working within that field is allowed any degree of financial difficulty. Are you employed or self-employed?


    Dennis
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • s1985
    • By s1985 6th Dec 17, 12:57 PM
    • 16 Posts
    • 0 Thanks
    s1985
    • #5
    • 6th Dec 17, 12:57 PM
    • #5
    • 6th Dec 17, 12:57 PM
    Hi s1985


    For the same reasons you give above, I too would suggest that, if anything, it makes more sense for you to make the creditor aware of the adverse effects any CCJ would end up having - both on you and on their ability to recoup any money from you. It wouldn't be rational for them to choose a course of action that would backfire on them.


    First of all, though, I'd suggest that you investigate in more detail exactly what the effects of any court judgment/insolvency would be. "Financial services" is a very broad term and it doesn't automatically follow that no one working within that field is allowed any degree of financial difficulty. Are you employed or self-employed?


    Dennis
    @natdebtline
    Originally posted by National Debtline
    Hi Dennis,
    I'm employed in Insurance, my employment contract doesn't allow it & it is likely my qualification membership would become void too. I can investigate this in more detail as you suggest though.

    With token payments does a creditor typically charge interest on top of the balance basically negating any payments made?
    • sourcrates
    • By sourcrates 6th Dec 17, 6:10 PM
    • 12,673 Posts
    • 12,014 Thanks
    sourcrates
    • #6
    • 6th Dec 17, 6:10 PM
    • #6
    • 6th Dec 17, 6:10 PM
    With token payments does a creditor typically charge interest on top of the balance basically negating any payments made?
    Originally posted by s1985
    A mortgage shortfall is regarded as an unsecured debt.

    The creditor cannot add further interest or charges, unless the original agreement allows them to do so.

    You may want to check your paperwork to see what it says.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
  • National Debtline
    • #7
    • 6th Dec 17, 6:15 PM
    • #7
    • 6th Dec 17, 6:15 PM
    Hi again


    Thanks for clarifying re: the employment situation - it's just worth knowing exactly what is/isn't at stake in your dealings with this creditor.


    Where a mortgage shortfall is concerned, the debt will typically have "crystallised" i.e. frozen upon repossession and the subsequent sale. So no, I wouldn't normally expect to see a debt of this nature gathering any fresh interest now.


    Have there been any indications in your correspondence with them that they are trying to add anything to the balance?


    Dennis
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • fatbelly
    • By fatbelly 6th Dec 17, 6:38 PM
    • 11,644 Posts
    • 8,779 Thanks
    fatbelly
    • #8
    • 6th Dec 17, 6:38 PM
    • #8
    • 6th Dec 17, 6:38 PM
    Keep this in the back of your mind: if they start a court claim you can avoid a ccj with a Tomlin Order

    https://www.stepchange.org/debt-info/debt-collection/tomlin-order.aspx

    Mortgage shortfall debts are not usually pursued aggressively, and get the best (often <20%) full & final settlement deals because they are often large, and owed by non-homeowners who have multiple debts and general financial chaos, and who often go bankrupt.

    I would not let them know that you are not in that group.

    National Debtline have an impressive suite of letters relating to mortgage shortfalls, all linked to here

    https://www.nationaldebtline.org/EW/factsheets/Pages/mortgage-shortfalls/mortgage-debt.aspx
    • s1985
    • By s1985 6th Dec 17, 8:49 PM
    • 16 Posts
    • 0 Thanks
    s1985
    • #9
    • 6th Dec 17, 8:49 PM
    • #9
    • 6th Dec 17, 8:49 PM
    Hi again


    Thanks for clarifying re: the employment situation - it's just worth knowing exactly what is/isn't at stake in your dealings with this creditor.


    Where a mortgage shortfall is concerned, the debt will typically have "crystallised" i.e. frozen upon repossession and the subsequent sale. So no, I wouldn't normally expect to see a debt of this nature gathering any fresh interest now.


    Have there been any indications in your correspondence with them that they are trying to add anything to the balance?


    Dennis
    @natdebtline
    Originally posted by National Debtline
    Thanks, can't find anything to suggest that interest may be added as such but there was mention in one letter of fees & charges that may be added if they outsource the account to a debt collection agency.
    • s1985
    • By s1985 6th Dec 17, 9:08 PM
    • 16 Posts
    • 0 Thanks
    s1985
    Keep this in the back of your mind: if they start a court claim you can avoid a ccj with a Tomlin Order

    https://www.stepchange.org/debt-info/debt-collection/tomlin-order.aspx

    Mortgage shortfall debts are not usually pursued aggressively, and get the best (often <20%) full & final settlement deals because they are often large, and owed by non-homeowners who have multiple debts and general financial chaos, and who often go bankrupt.

    I would not let them know that you are not in that group.

    National Debtline have an impressive suite of letters relating to mortgage shortfalls, all linked to here

    https://www.nationaldebtline.org/EW/factsheets/Pages/mortgage-shortfalls/mortgage-debt.aspx
    Originally posted by fatbelly
    Thanks, interesting to know about tomlin orders. Hopefully it will not get to that stage.

    I have tried a few times for f&f settlements but only 10%, I think I could get to 20% so I'm going to write to them with an offer of monthly payments (which will be low based on disposable income) or 20% and see what they say.
    • s1985
    • By s1985 6th Dec 17, 9:39 PM
    • 16 Posts
    • 0 Thanks
    s1985
    A mortgage shortfall is regarded as an unsecured debt.

    The creditor cannot add further interest or charges, unless the original agreement allows them to do so.

    You may want to check your paperwork to see what it says.
    Originally posted by sourcrates
    Thanks, having checked the paperwork its not overly clear be honest. I did however find a letter just prior to repossession that stated that they reserve the right to charge interest on any shortfall, so presumably they feel that they can within the terms - although this hasn't happened to date (about 5.5 years now since the repossession)
  • National Debtline
    Speaking from professional experience, the overwhelming majority of mortgage shortfall debts either end up:
    (a) being included in bankruptcy,
    (b) being settled for a significantly reduced lump sum or
    (c) occasionally becoming statute-barred as they're left to wither and passed around various debt purchasers.


    In all of the above three scenarios, it ends up being a moot point whether any further interest or fees are claimed. This debt collector won't realistically expect to recoup the full paper balance, let alone any extra charges on top, as by definition someone who's been through repossession is unlikely to be rolling around in spare cash (see also fatbelly's observations further above).


    Dennis
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

4,013Posts Today

7,394Users online

Martin's Twitter