Complex Post BR Credit Cleaning Question MORTGAGE DEFAULT

garyclay

Hi,

I've been through the process of cleaning up my credit file post bankruptcy but have an issue with Skipton my previous mortgage provider.

I was declared bankrupt in June 2010 and discharged a year later. After extensive letter writing all of my other lenders changed the default date to date of BR.

However Skipton refused. As the house was in negative equity the OR was not interested in the property and myself and my wife continued to live in the property. Following the breakdown of my marriage a few weeks post BR I moved out. Although I did my best to help my wife the mortgage fell into arrears and was eventually voluntarily repossessed.

As part of my credit file I wrote to Skipton quoting the guidance in the ICO 2007/14 letters namely......

“[paragraph 14] [If the loan has been included in a bankruptcy] the default should be filed in accordance with the guidance in paragraphs 47 – 48
[paragraph 48] If the customer stops payment at a later stage, the default recorded should show the date of the IVA or bankruptcy and the fact that it was settled only by IVA or bankruptcy…”

However Skipton refused saying the date of repossession was the date of default.

I took the matter up with the ICO and they concluded that

Your complaint to us

In your case, the matters you have raised that are relevant to the DPA relate to the fourth data protection principle. This says that personal data must be accurate and up to date.

You were declared bankrupt on 3 June 2010 and subsequently discharged on 3 June 2011. The house upon which your account was secured was repossessed on 5 November 2012 by Skipton. After discussing the matter with the Insolvency Service, you state that this debt now forms part of your bankruptcy.

You are concerned that Skipton has marked the default in question later than your bankruptcy.

You have addressed this issue with Skipton and appear not to have received a response to your latest request. You want Skipton to correct the following:

- The default entry on the account must reflect the date of bankruptcy being 3 June 2010.
- To mark the account in some way as to indicate that it is settled or satisfied.

Our assessment decision

I wrote to Skipton about this matter and have now received its response. On the basis of all of the information provided by you and Skipton, we have decided that it is likely that Skipton has complied with the requirements of the DPA in this case.

This is because the mortgage in question was a joint mortgage. Where there is joint and several liability and one party becomes bankrupt, the account should not automatically be marked in default because the other party will be responsible for it and may maintain payments.

Therefore the date of bankruptcy is not the date of default for joint borrowers unless both parties are bankrupt. In your case, payments continued to be made. It was not until February 2012 that the mortgage began to fall in arrears and all direct debits ceased. In November 2012 the property was taken into possession and sold in May 2013. The mortgage was therefore redeemed in May 2013 and it is therefore this date which is reported as the point at which the mortgage was satisfied against your name. It is only once the property is sold that any loss or surplus is crystallized. So I believe this is the correct date used for the date of default because this is when it became an unsecured debt which was included in your bankruptcy.

In this case the mortgage was not fully repaid by the proceeds of sale. However, the record does show that the loan is ‘satisfied’ as against your name and this is demonstrated in the documents submitted by you.

As we have now made our assessment, the matter is now closed. Thank you for bringing it to our attention.

I am considering taking this up with the FOS based on the fact that

A) The decision is not in accordance with ICO guidance letters, upon repossession the shortfall became part of my BR and therefore the rules should be applied.
The decision means that I am financially impaired beyond the period that the BR remains on my credit reference file
C) That I had left the property and I cannot be responsible for the actions of another individual.

So is it worth the FOS approach?

Any thoughts, help, guidance or success stories would be fantastically appreciated!!!!!