Settlement Offer for a mortgage shortfall

treading_carefully

Posted on behalf of a friend. To cut a long story short, property was repossessed, shortfall of approx £70k (ouch). Property was in her sole name only. Her family could raise £20k and a settlement offer was put forward to Shoosmiths solicitors. Received communication that offer has been accepted but just want to check if there is anything else she needs to look out for. Wording is as follows,

"Our client is prepared to accept the sum of £20,000 in respect of your liability for the sum outstanding on the above account.

Please note this offer is strictly in respect of your liability alone and our client specifically reserves the right to pursue all other parties to the mortgage, including any guarantors, for the remaining sum outstanding."

So if the £20k is paid is the matter done and dusted or is there anything else to request in writing before writing cheque.

National_Debtline

Hello there,

It could be worth seeking clarification that the remainder of the debt will not be sold or assigned to any other debt collection agency and that any marks on the credit file (if it appears on there) are marked as fully satisfied. In reality, most creditors will place a partial settlement marker on the file but it will show a zero balance.

Best wishes,

David @ National Debtline.

treading_carefully

One other thing to enquire. There was a higher lending charge when mortgage was taken out in 2007. Is there a danger that she will be chased by an insurance company after supposedly settling debt with mortgage company. Reading around the old term was a MIG (mortgage indemnity guarantee).

Definitely would not want to be paying £20k to supposedly settle and then be chased months later for another huge debt.