Interesting Read Regarding statute barred debts....

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A man who did not pay his mortgage for 15 years has been told by a judge he can keep the house and will never have to repay the debt.


Djabar Babai took out a loan on the house in Heaton Mersey, Stockport, in 1989, but has not repaid anything since January 1993 - a £40 payment.
But because NatWest Bank took more than 12 years to take action, judges ruled that Mr Babai had squatters rights.
The bank lost its Court of Appeal bid to overturn the decision.
In a statement, NatWest said it was disappointed by the decision and was considering a further appeal to the House of Lords.
Lord Justice Mummery said the bank had delayed so long in taking repossession action against Mr Babai's home that it was too late.
He rejected arguments by the bank's lawyers that the decision would force other lenders to get tougher on defaulters and start proceedings at an earlier stage.

William O'Neill, of Manchester-based law firm Rowlands, agreed with the judge's decision.
He told BBC News: "As things stand lenders have ample time within which to take action to recover their money.
"What was unusual about this case was that NatWest took in excess of 12 years to take steps to recover money due to them. I think the case is highly unusual."
Mr Babai was made bankrupt shortly after making the last payment in 1993 and has not paid anything since. By 2006, the debt had spiralled to £165,000.
Legal proceedings
Although NatWest issued a formal demand in 1992 after Mr Babai struggled to make payments it took no steps to launch proceedings to repossess the house.
In 1993, it made another demand for payment but again failed to launch legal proceedings.
In March 2007, the High Court ruled that Mr Babai had squatters rights over his home and earlier this week the bank failed in an appeal.
Lord Justice Mummery ruled the bank had no right to enforce the mortgage under the terms of the 1980 Limitation Act because more than 12 years had passed without legal action being taken. Mr Babai now legally owns the property, which is valued at about £200,000.

Lucky Guy :money: :T

Copied from bbc news http://news.bbc.co.uk/1/hi/england/manchester/7243246.stm
War does not decide who is right, It decides who is left.

Comments

  • rog2
    rog2 Posts: 11,650 Forumite
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    That is, to be perfectly honest, a fine example of exactly how the LAW should be applied.

    The Limitation Act gives creditors a certain amount of time to pursue debts. In England and Wales it is Six Years for most consumer debts, although property related debts do have a Twelve Year 'Limitation Period'. Furthermore, whilst, in normal consumer debt, written acknowledgement, within the limitation period must be from the debtor, with property related debt, that written acknowledgement, at least for the first six years, can also be from the creditor. Nat West have messed up and they must, in all fairness, live with the consequences of their own inefficiency.

    It may look, due to the sum of money involved, unfair to some, but, as the Judge said - Nat West had more than sufficient time to pursue this 'debt'.

    We hear of so many cases where creditors and debt collectors get away with collecting debts that are 'Statute Barred' by relying on the average debtor's ignorance of the rights that the Limitation Act affords them, that it is difficult to summon up any sympathy when a creditor falls foul of the Law, for whatever reason.

    I also think it will be totally unfair if they are allowed to appeal to the 'House of Lords' - why should the Financial Institutions be allowed to choose which laws they need to respect?

    He is, indeed, a lucky man.
    I am NOT, nor do I profess to be, a Qualified Debt Adviser. I have made MANY mistakes and have OFTEN been the unwitting victim of the the shamefull tactics of the Financial Industry.
    If any of my experiences, or the knowledge that I have gained from those experiences, can help anyone who finds themselves in similar circumstances, then my experiences have not been in vain.

    HMRC Bankruptcy Statistic - 26th October 2006 - 23rd April 2007 BCSC Member No. 7

    DFW Nerd # 166 PROUD TO BE DEALING WITH MY DEBTS
  • LilacPixie
    LilacPixie Posts: 8,052 Forumite
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    Having dificulty mustering any sympathy for Natwest. It is not like the guy did a bunk and was untracable for several years, it actually sounds like he was still living in the mortgaged property.

    I hope that they accept the judges decision. After all it must of already wasted a fortune on legal fees,
    MF aim 10th December 2020 :j:eek:
    MFW 2012 no86 OP 0/2000 :D
  • fermi
    fermi Posts: 40,546 Forumite
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    NickWarren wrote: »
    Lucky Guy

    Stupid bank really. :rolleyes:

    Banks/creditors are fully aware of the law in this area, so complaining after their own incompetence is not going to get a lot of sympathy.
    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
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