Almost 6-year-old mortgage debt

tiffany_lamp

Hi - linked to a nasty split from my ex, he ended up giving the keys back to the mortgage company about 7 years ago. We had very little to do with each other from the time I left (it was dangerous for me to speak to him too much!) but I can see from Zoopla that the house sold for around £35k less than the mortgage value, in October 2010.

Question 1 - am I right in thinking that any debt from the property selling for less than the mortgage value will be wiped after six years? And, if so, is it safe for me to assume that the October date on Zoopla is the date to go from?

I've switched banks since then, and the mortgage had been with C&G who I believe are now part of TSB?? Touch wood, I haven't had any correspondence chasing any mortgage debt - BUT, due to me staying with a friend of a friend for a while after I left my ex, I did have a letter passed to me a year or so ago that had been sent to me there. It was from a debt collection agency on behalf of Welcome Finance. We took out a secured loan years back with Freedom (part of Welcome?) but we paid it off in full way before my ex stopped paying the mortgage. However the debt collector seems to be going after the full amount of the Freedom loan!!

Question 2: I realise they possibly had a hold on the deeds from when it was a secured loan, but surely if we paid it off in full they can't claim any of it as a 'debt'???

Sorry for the long message but would love to hear any advice! I'm planning to do a PPI claim but have held back because I don't want to do anything that might lead any debt agencies to my current address! Could that happen??!

TL

[Deleted User]

tiffany_lamp wrote: »

Question 1 - am I right in thinking that any debt from the property selling for less than the mortgage value will be wiped after six years?

It's 12 years before mortgage debt is statute barred.

tiffany_lamp

Oh! I'm not sure where I thought it was 6 - thanks for confirming. Any idea what the odds are of them coming for me if they haven't so far? As I say, I believe C&G were part of Lloyds but split with TSB became it's own bank. What are the chances (she says hopefully) of them wiping the debt at that point?

[Deleted User]

Do they have your current address? If not, have you checked your credit files to see if a CCJ has been registered?

tiffany_lamp

No I haven't yet, but I take it that's something I should do? If a CCJ *has* been registered, does that make my situation worse or better? No, they don't have my current address.

sourcrates

tiffany_lamp wrote: »

No I haven't yet, but I take it that's something I should do? If a CCJ *has* been registered, does that make my situation worse or better? No, they don't have my current address.

Be warned, checking your credit file will alert them to your new address, as these details will be needed so the CRA can identify you.

tiffany_lamp

Yes that' what I've been concerned about!! As it's been almost six years, I'm tempted to just continue to lie low. It does feel a bit like sticking my head in the sand, but on the other hand if that's the sensible thing to do then I will continue to. I've worked so hard to pay off the various loans and card debts that my ex left me with, to avoid having to go bankrupt. And I'm worried that this Welcome 'debt' (which surely isn't even a debt if we paid them in full?!) will come back to bite me just as I'm back on my feet financially :-(

sourcrates

Well, there could be some good news for you.


Many lenders have recently agreed to a policy of not taking further action after the first six years. It is important to establish when the time limit runs from. This can be either the date when the money was first owed this is the time when the lender could have taken action to recover the debt and is likely to be much earlier than the date of repossession, perhaps when you were first in arrears with the mortgage. Or the last time any payment no matter how small was made.



If I was you, I would stay under the radar for now.

tiffany_lamp

Oh that would indeed be good news! See what I've pasted below in red - is this what you're referring to? The first default my ex made would have been more than 7 years ago now - so does the 6 years start from then?

So, assuming it is indeed good news as far as the mortgage (C&G) shortfall is concerned, I guess I still have the potential issue where Welcome Finance are chasing me for a debt that we actually paid off? (I clearly remember the excited feeling of making the final payment to them, and we never missed a payment). Surely they shouldn't have been able to claim that as a debt, and sell it to a DCA as they seem to have done?


The Council of Mortgage Lenders (CML) say in their policy:

“anyone whose property was taken into possession and sold more than six years ago, and who has not been contacted by their lender for recovery of the outstanding debt, will not now be asked to pay the shortfall”.

The CML policy is now part of the FCA’s MCOB rules. The CML part of MCOB is a voluntary code, but should be followed as good practice by lenders. MCOB only covers lenders that are regulated by the Financial Conduct Authority (FCA). If you are not sure if your lender is covered by MCOB,

sourcrates

That is what I was referring to yes.


Are you 100% certain the welcome loan was paid off ?


Is it possible the ex could of been withholding the payments ?


Sounds to me like that may be the situation.

tiffany_lamp

I'm sure I remember us both being together when it was paid off - it's going back about 10 years now though so now you've made me question myself!! But no I'm SURE I remember being so thrilled that we'd made the final payment. Is there a chance that they kept the claim on the deeds, and then when the house was force-sold they decided to act as though it was a claim that still had money owing??