Repossessed 4 yrs ago, now being chased for money

hellojack2003

Hi all

A long story, but basically my wife and I lost our house in 2008 and I went into bankruptcy in May 2009. Recently I received a call from Northern Rock asking for payment of the outstanding balance from our old mortgage. I explained I went bankrupt so they left me alone. A few weeks later, my wife received a letter from Transcom requesting payment of approx £27000 to cover this debt.
I remember reading somewhere, that an old mortgage debt can sometimes be negotiated down to as little as 5-10% of the original balance, Is this right? What is the correct course of action to follow for this? With the exception of this, we have no other debts and feel that we're getting back on our feet until we received this letter!
Our aim is to try and get back on the property ladder in 3 years time when my bankruptcy comes off my credit file.
Many thanks in advance for all your help.

fermi

---> Letter to creditors making demands for payment after bankruptcy

hellojack2003

HI fermi

Just wondering why you've posted that link to my enquiry? The company are now chasing my wife for the debt and she didn't go into bankruptcy, it was only me. I'm now after some advice on how to deal with this.

antrobus

hellojack2003 wrote: »

...A long story, but basically my wife and I lost our house in 2008 and I went into bankruptcy in May 2009. Recently I received a call from Northern Rock asking for payment of the outstanding balance from our old mortgage. I explained I went bankrupt so they left me alone. A few weeks later, my wife received a letter from Transcom requesting payment of approx £27000 to cover this debt.

That's right. It's very probable that you and your wife were jointly liable for the mortgage. Your bankruptcy prevents them from chasing you for the (presumed) mortgage shortfall, but leaves your wife to carry the can.

hellojack2003 wrote: »

....
I remember reading somewhere, that an old mortgage debt can sometimes be negotiated down to as little as 5-10% of the original balance, Is this right? What is the correct course of action to follow for this?

Make em an offer.That's it really.

withabix

hellojack2003 wrote: »

HI fermi

Just wondering why you've posted that link to my enquiry? The company are now chasing my wife for the debt and she didn't go into bankruptcy, it was only me. I'm now after some advice on how to deal with this.

You didn't make that entirely clear.

They can chase your wife for the outstanding debts if they were in joint names.

Lou67

Hi 'hellojack'

I was also told that if my husband went bankrupt and I didn't, that the creditors would chase me for any debts that were in both our names...., even our mortgage (which was always in joint names!) So if HE went bankrupt, *I* would still be chased for the debt... and that is why I went bankrupt at the same time.

Anyway, as your wife didn't go bankrupt too; I think that it would be a good idea to make them an offer, maybe through a financial advisor like the C.A.B, and not an advisor who charges you. They may well accept as little as a third of it, just to get something! So start low! Good luck

hellojack2003

My wife was going to go bankrupt too but the judge wouldn't grant the order as she had so little debt other than the mortgage and at the time of going bankrupt we weren't aware what the shortfall would be. Clearly this is still an option but one we would rather not take. NOt in a position to say a lump sum of circa 30%, but could perhaps stretch to 10 at a push.

fermi

hellojack2003 wrote: »

HI fermi

Just wondering why you've posted that link to my enquiry?

Misread and thought you both had gone BR.

There are some tips on negotiating in this factsheet.

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=11_mortgage_shortfalls#chapter9

Plus letters asking the lender to agree to a settlement, or even write off the debt.

Lou67

hellojack2003 wrote: »

My wife was going to go bankrupt too but the judge wouldn't grant the order as she had so little debt other than the mortgage and at the time of going bankrupt we weren't aware what the shortfall would be. Clearly this is still an option but one we would rather not take. NOt in a position to say a lump sum of circa 30%, but could perhaps stretch to 10 at a push.

Awww, that's rotten luck! What a pain. I guess this has resulted with the dramatic fall in house prices. What a shame. I have heard of this happening to a few people who were actually shocked by it! They basically gave up the keys and voluntarily surrendered the house, not realising that when the mortgage lender sold it on, if the amount raised was not sufficient to pay off the mortgage, they would be liable for the shortfall!

Definitely a good idea to ask the C.A.B. if they can liaise with the company to accept whatever you can offer/afford.

BTW, they took their time getting back to you and your wife didn't they?! 4 years since! I wonder if them taking so long would give you any case to not have to pay? May be worth looking into.

uptheanti

i had my house repossessed back in the 90s when sold there was a shortfall of around 40000 five and a half years later they came after me for it i negotiated it down to 5000

Trollfever

BTW, they took their time getting back to you and your wife didn't they?! 4 years since! I wonder if them taking so long would give you any case to not have to pay? May be worth looking into.

Statute of Limitation for land and property debt is 12 years in England & Wales and 20 years in Scotland.

See National Debtline link above.