Mortgage debt recovery after 6 years

Frugal_Faerie

In May 2000 my house was repossessed by the Halifax due to 3 months defaulted payments on the mortgage causing around £1,000 of debt to accrue (I really wish I'd had somewhere like MSE back then as it never would have got to that stage if I'd had some proper advice, but never mind!). The house was then sold in auction for approx £40,000 below market value, and also £15,000 less than the outstanding mortgage owed on the property! (It should be them paying me back, not the other way round :mad: )

The mortgage was in joint names with my ex and he was the one who had defaulted on the payments, as per our arrangements when we separated, but nevertheless, the Halifax insisted on pursuing only me for the outstanding debt. I struggled to pay some of it back but all the stress I was under from having lost my home and trying to finish my HND whilst holding down a job as a single mum caused me to have a nervous breakdown and I ended up in hospital for several months.

I don't recall much of what happened following that but my payments to the Halifax ceased as I had to claim income support when I came out of hospital, so couldn't afford to pay them anymore. I didn't hear anything more from them and presumed they'd written off the debt due to my circumstances. I later found out that my ex had been making payments to them instead, or so he said!

Now this morning, like a bolt out of the blue, I've received a letter from a solicitor acting on behalf of the Halifax demanding I pay them over £13,000!!! They have also attached an income/expense form and are requesting to see all my bank statements for any accounts I or my children hold, as well as proof of all income.

I am worried sick about all this now as I'm only just getting back on my feet again almost six years on, and have recently moved house and thought I could put all the past behind me and finally move on with my life.

How on earth did they find me here anyway as I only moved in a few weeks ago!!! Not that I'm trying to hide from anyone or anything but I'm not even on the electoral roll here yet and I haven't applied for any form of credit since moving in, so I'm puzzled as to how they know where I am. And why wait until now to chase me for this money when they've had six years to do it and I was even banking with them until a year or so ago, so they've known exactly where I was all this time anyway.

Can they force me to pay this money now and should I be liable for the full amount anyway, as it was a joint mortgage, and how much are they allowed to take out of my income support? Are they also allowed to take anything from my DLA to pay off this debt? If I ignore them will they send the bailiffs in? I just don't know that I can deal with all this

silvercar

Seek advice from CAB before you do anything.

There is some reason why they are contacting you after 6 years; something to do with getting you to acknowledge the debt, then they can pursue you for another six years.

My knowledge on this is really hazy so please seek expert advice. By even writing back to them you could be allowing them to chase you in the future. This may be one of those (rare) cases where ignoring them is the safest option.

rchddap1

I seem to remember that mortgage debt can be chased for up to 12 years. And yes they can add interest onto the debt. In fact my MIL had been fighting a similar case, but for one reason or another (won't go into detail here) they managed to stuff themselves and it went to court (MIL won by the way).

I would certainly talk to the CAB. However, if you don't have £13k then they can't take it from you. Is it possible that your ex gave them your new address after they couldn't get the money from him?

Frugal_Faerie

rchddap1 wrote:

Is it possible that your ex gave them your new address after they couldn't get the money from him?

No, that's the first thing I thought of so called him to ask but he said he hasn't had any contact with them himself for some time now.

If I don't respond to this letter what are they likely to do next? Does the 6 years run from the date of repossession or from the last time either I or my ex had any contact with them? If the former, then I have almost 3 months to sit tight and wait, but if not then this could drag on forever

I know it might sound to some like I'm trying to evade a debt, which in a way I suppose I am, but this isn't something like a credit card or loan debt whereby I've already benefitted from the proceeds and actually "owe" them the money. The Halifax were in the wrong to sell my house at such a loss and well under market value, thereby putting me unnecessarily into debt with them, and I seem to remember from speaking to a solicitor at the time that there was some question over whether they could legally enforce payment of the outstanding amount due to the way they'd proceeded with the repossession.

I don't recall the specifics now and I no longer have any of the paperwork relating to any of it to refer to. I also fear trying to fight a legal battle with them at this stage may well put me back in hospital too

rchddap1

As I said.....they can chase you for the debt for up to 12 years .... not 6! With my MIL the mortgage company sent a letter just before the 12 years were up (despite the fact that they knew exactly where she was for the previous 12 years). Fortunately they made a few mistakes which meant that she won the court case and didn't have to pay the amount demanded (in fact they retreated rather rapidly towards the end of the case once all the facts were known). However, in here case some specific information (about some major bodges on the part of the mortgage company) was known and was kept (she's a hoarder) giving her the leverage she needed

However, for you its not a simple case of 'sit tight for a couple of months and hope they go away'. Chances are they won't. You need to face this.

Sarah1970

Hi

I have just noticed your post regarding the Halifax chasing you after six years. In February last year (05) I had the same. I purchased a house back in 1993 with my ex husband - my name was only put on the mortgage to give us an extra £1000.00 onto the amount we could borrow, and this was my child benefit that I claimed for my son as I didn't have any other earnings due to being a housewife.

My ex husband was a gambler so it wasn't long before we (he) fell into arrears with the mortgage and like you the house was repossessed with around £1000.00 of arrears. I was unable to pay this due to me having no earnings other than my child benefit.

The house was repossessed in June 1995. The Halifax made no attempts to advertise the house on the open market for the chance of receiving the correct value of the house, instead they sold the house at auction 12 months later for £17,000 (£20,000 under the market value!!!)

Now 10 years later having heard nothing from the Halifax, out of the blue I receive a letter from debt collectors acting on their behalf demanding just under £23,000. At the time of taking out the mortgage I do remember them saying that should we default on the mortage we are insured by Sun Alliance Insurance.

Worried, I contacted the debt collectors to ascertain as to why after 10 years they have suddenly decided to contact me for this debt. They have made no attempt to contact my ex husband and made me an offer, that if I paid them £6000.00 in a lump sum they would exonerate me from the outstanding amount. I informed them that I would need to seek professional help before agreeing to anything, however their comment was that they were not prepared to stall the account whilst I sought this advice!!!!!!!!!!

I did however come across another person who was also in a similar situation, and after sending a letter their debt was completely wiped out. I therefore went along the same route and sent a letter to the debt collectors requesting copies of all marketing material for the resale of the property, details of the insurance policy with Sun Alliance, the mortgate contract, details of the endowment policy, copies of the valuation relating to the sale of the repossed property etc. I requested all this information in February 05 in preparation for me seeking legal advice, and to this date I still have not had any reply from the Halifax.

I did receive a telephone call approx 2 months ago asking why I had not made any offer/proposals to settle the debt. I informed the caller that I was awaiting a reply to my letter of February 05 with copies of the information I had requested. They informed me that they had sent this information in April 05. Whether they did or not I did not receive it and am still waiting now!!.

Can I please ask how you have got on, did you get any good advice that maybe I could use for the next time they contact me. I am so worried I just haven't got this sort of money and even if I made an offer I would be paying it off until the day I die!!!!!!!!!

If anyone has any advice that they can give I would be extremely grateful.

Thanks in advance