Secured Loan Queries

Divorcing

Hi All

Took out a secured loan some years ago, since then my wife and I have separated and are undergoing divorce proceedings.

As such payments have been missed and arrears built up to the point where Court action was taken.

Wife agreed to pay the payments plus an amount towards the arrears and the Court made an order to that effect.

I have two questions that I would very much appreciate advice on:

1. The charges for missed/late payments are £60, is this legal given the bank charges fiasco, I know they are different services, agreements etc but still seems unjust.

2. The loan company have continued to put arrears markers on the account and have said they will do until the arrears is paid, which at the rate it is being paid will be 3 years. Obviously I am not happy with this, is this correct they can do this given there is a Court order? If so is there anything I can do as I'd rather the property the Mortgage is secured against was sold or the loan transferred to my Wife as she wants to keep the property. We do have 1 child of 13 at school but it is a 4 bed house.

I know there is alot there, with complications but any help would be most gratefully received, many thanks in advance!

DP

DevCoder

1. Yes they are legal, the banks won the court case.
2. Whilst the payments are in arrears then the late/missed payments markers show a true reflection of what is happening.

jellie

Divorcing wrote: »

Hi All

Took out a secured loan some years ago, since then my wife and I have separated and are undergoing divorce proceedings.

As such payments have been missed and arrears built up to the point where Court action was taken.

Wife agreed to pay the payments plus an amount towards the arrears and the Court made an order to that effect.

I have two questions that I would very much appreciate advice on:

1. The charges for missed/late payments are £60, is this legal given the bank charges fiasco, I know they are different services, agreements etc but still seems unjust.

2. The loan company have continued to put arrears markers on the account and have said they will do until the arrears is paid, which at the rate it is being paid will be 3 years. Obviously I am not happy with this, is this correct they can do this given there is a Court order? If so is there anything I can do as I'd rather the property the Mortgage is secured against was sold or the loan transferred to my Wife as she wants to keep the property. We do have 1 child of 13 at school but it is a 4 bed house.

I know there is alot there, with complications but any help would be most gratefully received, many thanks in advance!

DP

1. Yes they are, the banks won that one.


I would have thought any settlement regarding the property and any debts would have been covered in the divorce settlement, particularly as you have a child.


Isn't your solicitor dealing with these kinds of issues?

Thrugelmir

1. The administration of accounts in arrears is a costly exercise. So yes the charges are reasonable.

2. The Court Order does not absolve you of responsibility for the debt. As it's merely an arrangement between you and the ex. Your liability for the debt still legally stands. In accordance with the original contract that you signed. If the account is in arrears then the credit records of all parties will be marked accordingly.

As for the property. Yes, a 4 bed property for 2 people sounds excessive. This needs to be considered when the assets are divided. Of course provision will need to be made for your child. Which will impact the outcome. Something your solicitor will advise you on.

National_Debtline

Hello there.

1. The charges for missed/late payments are £60, is this legal given the bank charges fiasco, I know they are different services, agreements etc but still seems unjust.

The test case was simply in relation to bank charges. There have been no definitive test cases for loan, credit card or indeed mortgage charges. There have been plenty of examples where people have successfuly reclaimed the penalty charegs imposed on them by their mortgage lenders. Sadly, I cannot tell you what the likely outcome would be for you, but do consider researching this further so that you can decide your best option.

2. The loan company have continued to put arrears markers on the account and have said they will do until the arrears is paid, which at the rate it is being paid will be 3 years. Obviously I am not happy with this, is this correct they can do this given there is a Court order? If so is there anything I can do as I'd rather the property the Mortgage is secured against was sold or the loan transferred to my Wife as she wants to keep the property. We do have 1 child of 13 at school but it is a 4 bed house.

The loan company will be able to process arrears information on your credit files, sadly. The only realistic way that you'll be able to have the house sold is with your wife's consent. If you applied to seek a court order to sell the court are likely to allow your wife to stay in the property if it's the 13 year old's home. The mortgage could be transferred solely in to your wifes name so long as she can demonstrate to the lender that she can afford it in her own right.

Hope you find this information useful.

David @ NDL.