Harassment after bankruptcy

diggerproud

My partner was declared bankrupt in April last year due to not being able to sell her flat & Nram making it unfeasible to rent out the property. She had no option other than to seek advice & was advised to go bankrupt. The keys to the property were sent back to Nram recorded delivery with a signed, witnessed letter giving up possession of the property. Nram insisted that my partner signed their document but refused after taking legal advice. Over the following months she was hounded via letters & calls to the point she received treatment for depression. Nram were referred to the OR but continued harass. My partner moved into my home & the harassment continued. I spoke to numerous morons on the phone & they finally stopped the calls after I threatened to report to the police as it was my home they were calling. The letters continued stating how much arrears she owed & they stated that until the flat was sold they can continue to contact her. A man called to our home today in regards to the flat & again I explained she was bankrupt. He shook his head in disbelief & said he would fill his report in. My partner broke down again as she fears this harassment will never stop. It is not acceptable to hear someone you love mention suicide & I need this to stop. Will this go away when she is discharged after 12 months or is there anything we can do? Thanks in advance

alastairq

Hi--sorry to disappoint you, but until the property has been disposed of, the mortgagor is 'entitled' to pursue the mortgagee for the arrears.

The BAnkruptcy will only take effect [with regards to the property] once the property has been disposed of, and the mortgagor then pursues the mortgagee for the shortfall of equity.

The shortfall having become an unsecured debt...and because the original account [the mortgage] was initiated prior to the Bankruptcy, the shortfall becomes a debt in that BAnkruptcy....so cannot then be pursued.

At the moment any debt associated with the mortgage is a secured debt, which is outside the realm of the Bankruptcy.

As it happens, Fermi has a template somewhere, whereby the mortgagor can be informed that they still hold the property as security, so pursuing for mortgage payments is pointless.

They should make haste to re-possess and dispose of the property.

Achieving Automatic Discharge from the BAnkruptcy does not affect this aspect.

Your partner is in need of support at this time....

lilybankrupt

The difficulty you have I think is that until the flat is sold the NRAM debt is still 'secured' and so they can chase for it.

Once the flat is sold, any shortfall will become unsecured and then falls into the bankruptcy, at which point they can no longer chase.

But, even though they are entitled to chase that doesn't mean they are entitled to harrass. I believe you can request that all contact is made by post and they have to comply - if they don't then you can report them to the relevant body.

Someone will hopefully be along with a good letter template soon :-)

lilybankrupt

hahahaha crossed post with alastairq :-)

fermi

They can go after the property to repossess it, but the liability to make mortgage payments is an obligation extinguished by the bankruptcy, so they should not be chasing you/her.

http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=48496

complaint

Mr F has complained that Bank of Scotland plc (trading as Intelligent Finance) continued to pursue him for payment of a mortgage for which he is no longer liable.

our initial conclusions

Our adjudicator recommended that the complaint should be upheld and that Intelligent Finance should pay Mr F £250 for distress and inconvenience.

Intelligent Finance did not agree with our adjudicator’s conclusions.

It says that Mr F remains liable to repay the mortgage.

my final decision

To decide what is fair and reasonable in this complaint, I have considered everything that Mr F and Intelligent Finance have provided.

I do not agree that Mr F remains liable to repay the mortgage.

The right to enforce the security in the event of discharge from bankruptcy is preserved by section 281(2) of the Insolvency Act 1986.

However, section 281(1) says that where a bankrupt is discharged, the discharge releases him from all the bankruptcy debts.

This means that, although Intelligent Finance is entitled to enforce its security over the property, Mr F is not liable to pay the monthly instalments and Intelligent Finance should not be pursuing him for payment.

I do, however, accept that, whilst Mr F remains a legal owner of the property, he would have to be named in any proceedings for possession.

I am satisfied that it is reasonable for Intelligent Finance to pay Mr F £250 to compensate him for the distress and inconvenience he has suffered as a result of Intelligent Finance’s refusal to accept that he is no longer liable to repay the mortgage.

My final decision is that I uphold this complaint.

In full and final settlement Bank of Scotland plc should: Pay Mr F £250; stop contacting Mr F regarding the mortgage, except insofar as this is necessary for the purpose of enforcing its security; and stop providing information about the mortgage in respect of Mr F to credit referencing agencies.

Under the rules of the Financial Ombudsman Service, I am required to ask Mr F either to accept or reject my decision before 11 November 2013.

signed: ***** ****** date: 10 October 2013 **** ombudsman at the Financial Ombudsman Service

The ombudsman may complete this section where appropriate – adding comments or further explanations of particular relevance to the case.

ombudsman notes

Mr F was made bankrupt in 2009. Prior to his bankruptcy he was a joint owner of a property that was mortgaged to Intelligent Finance. Mr F says that Intelligent Finance continue to contact him regarding the payments due under the mortgage. He says that he believes that Intelligent Finance may also be providing adverse information about him to credit referencing agencies.

diggerproud

She was summoned to court several weeks ago to allow Nram to seek posession of the flat & was again advised not to attend or reply. Nram were almost certainly given 'posession' of the property even though they've had the keys nearly a year now. The calls have stopped, the letters keep coming but now we are expecting more people turning up unannounced after today. I find it difficult to understand that Nram have allowed the property to stand empty all this time whilst losing thousands in mortgage payments, rather than selling at auction, where they are guaranteed to lose thousands more. The sooner they sell it the better....thanks for your advice so far

fermi

Sadly that is what NRAM are usually like. They seem prefer to completely shoot themselves in the foot rather than act reasonably.

Have seen the same on here again and again and again and again and again.....

TheGardener

It seems from the knowledgeable posters above there is not much you can do to stop the letters just yet so I suggest some novel uses for the letters in the meantime

• Make them into paper airplanes and 'fly' them off a bridge or out of a high window (having removed the name & address of course)
• Tear them into little strips and put them in the compost bin for the worms to chomp on
• Use them as 'wicks' to light the gas stove (a favourite of mine)
• Put them in the bottom of the BBQ before you light it.

Your partner is very lucky to have someone to support her so well. :A
(possibly scan them first so you have the 'evidence' of harassment if you make a complaint)