Old loan, bank had forgotten, no statements or communications, now 78p daily interest

gbgeer43

Hi everyone

This question is actually for a family member but I shall be writing in the first person for easier reading.

My ex-husband and I took out a loan with Natwest about 25 years ago. This was secured against the house and listed as a second charge on the property alongside our actual mortgage (Woolwich).

We got divorced and part of the divorce agreement was that he would pay the charge off over time and I got the house.
Years pass and I had received no communications from Natwest about this loan whatsoever in 20 years so I was under the impression that it was paid off.

Now I've started looking into selling the property and the Natwest charge is still listed at the land registry.

I asked Natwest about it as assumed it was just a mistake. It's taken them a few weeks to investigate but they have said the loan is still outstanding. Less than the original amount borrowed as some payments had been made. Though I'm not surprised he never paid it, he hadn't paid anything else that he should have.

However the loan has been accruing a daily interest charge of 78p. And this is since at least 1995. By my basic calculations this interest has added an additional £4000-£5000 to the loan amount.

Had I received some written communications or statements from Natwest then I could have paid this off 10 years ago and avoided having to pay all that additional interest.

Now I get the impression that Natwest had actually forgotten about this loan. I'm guessing back then they didn't have computer records for everything as they do now.
It has been in their financial benefit to "forget" this loan and keep the interest clocking up for 15 years.

But my question is this...
Do I have any rights or avenues of complaint with Natwest for charging 78p daily interest for 15-20 years despite never once sending a statement or even a letter saying that the loan still exists?

Thanks, gbgeer

bengalknights

As its over 6 years its statute barred and natwest should write it off.

mrcow

AFAIK it's 12 years for secured loans. (Still - 1995 would come under this).

Have any payments been made on it during that time? If not, Natwest should know better than to chase you for the money.

Tell them that you do not acknowledge the debt as it's statute barred.

gbgeer43

Hi everyone. Thanks for the info!
This could be brilliant!

I'm not sure if payments have been made since 1995. They have so far been unable to provide a statement or record

Would contacting them and asking for any further documentation void my chance of calling it statute barred?

So literally, tell them that I do not acknowledge the debt as it's statute barred?
Does that lead to a default on my record or anything?

Is there any negative to trying the statute barred method if it doesn't come off?

Cheers

mrcow

Asking them for the credit agreement as proof of the debt won't hurt. Just tell them that you don't acknowledge the debt. Are you sure this is just a straightforward secured loan that's gone "cold" (i.e. no CCJs or charging orders have been put on the house?).

There is a template letter that you could use if it helps, but personally I'd go with the "Please remove this debt from against the property as it is statute barred" and see where you get.

Loads more info here:

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=25_liability_for_debts_and_the_limitation_act

And letters here:

https://forums.moneysavingexpert.com/discussion/2606811


Do not make any payments on it - for any reason (even if they say it's for a statement etc.) as it will mean that you've acknoweldged the debt and they will chase you for the money.

gbgeer43

This is brilliant info - thanks so much
I was hoping there was some sort of mechanism like this.

Final question... how long can it take for them to process this and remove the charge?
I don't want it to hold up the sale process - I have no forward chain on my side.

Cheers

mrcow

The problem you have is that banks are very quick to impose charges, but getting them to reverse anything is like trying to steer a tanker - slow and often arduous. There really is no set answer. You are talking weeks, perhaps maany.

Brock_and_Roll

I am not sure Nat West are under any obligation to release the charge until the loan is repaid. The debt is still legally valid, the fact that it is Statute Barred just means they cannot pursue it directly.

StuTheDon

I agree with Brock - they will not remove the charge. All this means is that they can't legally chase the debt.

The other issue is that the debt (the loan) will be a joint responsibility to pay - assuming the mortgage and loan was in both names. If so they can chase either of you for the full amount upon sale of the house.

I'm sorry to dampen your original enthusiasm but this is going to take a long time to resolve, and you wont be able to sell until you fix it.

Bravehearted_2

!!!!!! statute barred doesn't mean the debt is magically wiped.

It still exists, they just can't chase it via courts.

The charge is still there so you're selling till its paid.

Off topic, who the hell agrees to keep paying off a house they're no longer allowed to live in. Not surprise he defaulted.

geoffky

Look up on consumer advice forums of how to sell your house with a charge still on it...it can be done