Can HSBC do this?

B_U_Stead

In 2022 I had no choice but to declare myself bankrupt. In 2018 I had purchased a flat with a mortgage from HSBC and two years later found myself needing to move. Initially valued at £160k I had a buyer within a couple of weeks. Five months later my buyers mortgage lender withdrew the offer at the eleventh hour and the sale failed.

At this point I really needed to move (health issues), so I resorted to offering the flat to a cash buyer at £80k. I moved to a rental and two days later the cash buyer pulled out of the deal.
I tried to auction the property for three months and failed.

At this point my reserves had run out and I had no alternative to bankruptcy.

The trustee of my bankruptcy took charge of the property and tried, over the next eighteen months to sell it and failed.

The trustee then disclaimed the property, this was six months after my bankruptcy discharge. HSBC repossessed it and started to market it. It is still for sale.

I now have an email from HSBC stating that as the trustee disclaimed the property after my bankruptcy discharge they will seek to recover any mortgage shortfall from myself.

I believe that HSBC are exceeding their rights in law and have raised a complaint against them with the Financial Ombudsman, but this will take several months to be assessed.

I wondered if anyone on the forum might have experienced similar, or have knowledge of cases like mine.

sourcrates

That debt should have vested in your bankruptcy, all debts outstanding prior to bankruptcy, with a few minor exceptions, are covered by it.

I suggest you contact your OR to confirm this is the case.

B_U_Stead

sourcrates said:

That debt should have vested in your bankruptcy, all debts outstanding prior to bankruptcy, with a few minor exceptions, are covered by it.

I suggest you contact your OR to confirm this is the case.

Thanks for the response. I will do this and see what happens.

B_U_Stead

The Official Receiver responded to my query, saying -

"It is the Official Receiver’s understanding that the shortfall would be included in your bankruptcy."

HSBC have acknowledged that they were made aware of the bankruptcy quite early in the process. They continued to chase me for monthly payments until I raised an official complaint 5 or 6 months later. They also incorrectly recorded the details of my default with the credit reference agencies and now they want to hold me responsible for a shortfall debt that cannot exist.

Are HSBC operatives so poorly trained as to have scant knowledge of the UK insolvency laws, or are they deliberately trying to scam money?

I'd be interested to hear any views on this.

MeteredOut

B_U_Stead said:

The Official Receiver responded to my query, saying -

"It is the Official Receiver’s understanding that the shortfall would be included in your bankruptcy."

HSBC have acknowledged that they were made aware of the bankruptcy quite early in the process. They continued to chase me for monthly payments until I raised an official complaint 5 or 6 months later. They also incorrectly recorded the details of my default with the credit reference agencies and now they want to hold me responsible for a shortfall debt that cannot exist.

Are HSBC operatives so poorly trained as to have scant knowledge of the UK insolvency laws, or are they deliberately trying to scam money?

I'd be interested to hear any views on this.

Most definitely the former.

sourcrates

Well you got it from the horses mouth, your not liable for this debt and the OR has confirmed this.

Put it all in a letter to HSBC mark it complaint.

B_U_Stead

@sourcrates - I've already complained to HSBC and their end game was to advise that they would seek to recover the full amount. As I said in my first post, I have escalated the case to the Financial Ombudsman. My first port of call for help was the Citizens Advice Bureau. I went through the history with them via live chat and they signposted me to a free
30 minute session with a lawyer 20 miles from where I live. Not ideal.

My second port of call was to start reading the entire Insolvency Act. Doable, but not easy. My ability to absorb data is not what it was. My third port of call was this forum. Very helpful.

@MeteredOut - says that it's probably lack of knowledge and training at HSBC. That is probably worse than an outright scam. How many thousands of HSBC customers are being ripped off in payment of debts that are figments of the HSBC operatives imagination?

sourcrates

Well if HSBC start a claim against you, you will have a full defence.

B_U_Stead

sourcrates said:

Well if HSBC start a claim against you, you will have a full defence.

Thanks for your help on this. I think the main issue here is - Why should I need a defence?  Why should an old codger like me have to research The Insolvency Act, looking for flaws in the claims made by a large financial organisation? Why should anyone need to seek advice from others on a public forum in order to refute statements made by a HSBC employee, who is being paid to be accurate and fair?

In truth, I don't believe there will be any claim against me. Any half decent lawyer working for HSBC would advise against the raising of such a case. In any event HSBC can't take any further action until the Financial Ombudsman complaint is resolved.

However, none of this alleviates the stress and anxiety the HSBC has caused, nor does it counter the hours of study and research I have undertaken in order to counter their assertions.

Okay, rant over. Once again, thanks for your help.

MEM62

B_U_Stead said:

sourcrates said:

Well if HSBC start a claim against you, you will have a full defence.

Thanks for your help on this. I think the main issue here is - Why should I need a defence?  Why should an old codger like me have to research The Insolvency Act, looking for flaws in the claims made by a large financial organisation? Why should anyone need to seek advice from others on a public forum in order to refute statements made by a HSBC employee, who is being paid to be accurate and fair?

Because, if they take action and you do not defend it, there will be consequences for you.  I accept that the moral answer might be different but, in these circumstances, you gotta do what you gotta do to protect yourself.  

B_U_Stead

MEM62 said:

B_U_Stead said:

sourcrates said:

Well if HSBC start a claim against you, you will have a full defence.

Thanks for your help on this. I think the main issue here is - Why should I need a defence?  Why should an old codger like me have to research The Insolvency Act, looking for flaws in the claims made by a large financial organisation? Why should anyone need to seek advice from others on a public forum in order to refute statements made by a HSBC employee, who is being paid to be accurate and fair?

Because, if they take action and you do not defend it, there will be consequences for you.  I accept that the moral answer might be different but, in these circumstances, you gotta do what you gotta do to protect yourself.  

Of course I would fight it if it came to that. At the moment it's in the hands of the Financial Ombudsman. From what I've discovered so far in terms of the structure of the legislation, the result of past cases and the past actions of the Financial Ombudsman against HSBC, it appears that my complaint has a good chance of being upheld. That would be good for me as an individual, but not necessarily for any future individual who the HSBC decide to bully.