Statute of Limitations

bobby6brown

approx 20 years ago, I handed the keys back on my house, since then I have moved around a lot and have heard nothing about the shortfall. I have now received a letter from a debt recovery company asking for my proposals for the repayment of the balance £76000.00! In the letter they threaten court proceedings unless I provide my proposals. I have little or no assets and certainly would not be able to make a realistic proposal. I have not acknowledged there letter or responded to them in anyway. I understand that the shortfall is statute barred under the Limitation Act 1980, but am worried as to why the debt is now being chased? I have no idea as to if there was a CCJ against me for this and as to whether the mortgage company can claim that they didn't have an address to contact me at and therefore that the debt can still be persued. Any constructive thoughts appreciated.

robpw2

if its been 20 years any ccj will have fallen off your credit file after 6 unless it was reapplied for.
I would strongly suggest you do NOTHING.
Theu can chase you for a debt 20 years old but could never go to court as its statute barred after 6 years.

So let them fish

iolanthe07

Actually mortgages are statute barred after 12 years, but as this was 20 years ago you're in the clear. They will try and bully you, but as long as you do not admit to the debt they can only use moral pressure. Tell them, politely of course, to pi$$ off.

RAS

Bobby

it is a bit different for mortgage based debt but the limit for that is 12 years in law, although a lot of comPANIES HAve agreed not to pursue debts after 6 years.

I would recommend that you talk to one of the debt charities http://www.moneysavingexpert.com/loans/debt-help-plan#help or shelter.

You may be aware of the recent case where a guy got squatter's rights to a house for which he had not paid for over 12 years? Basically, the mortgage company had not gone to court in the 12 years, despite threatening twice and so the debt was declared unenforceable.

However, you may need to write and tell them you are not paying. As I understand it, they have the right to ask you to pay, but not the right to enforce the debt or to chase you after you tell them you are not paying.

The only issue is if this was a joint debt? And your other half has made recent payments towards the debt?

bobby6brown

No, it was a sole debt

RAS

OK

Contact one of the debt charities and ask them if there is a standard letter that you can send out.

fermi

There are several standard letters and a very good summary of the legal positions in this factsheet.

Link: Factsheet | Mortgage Shortfalls

Really worth having a thorough read through, as it deal with all the issues discussed here.

This letter from the end of it seems most suitable here:

SAMPLE LETTER M5

USE THIS LETTER TO HELP YOU DISPUTE LIABLITY FOR A MORTGAGE SHORTFALL DEBT WHERE A CREDITOR HAS NOT CONTACTED YOU FOR OVER 12 YEARS AND YOU HAVE NOT MADE A PAYMENT OR WRITTEN ACKNOWLEDGMENT THAT YOU OWE THIS DEBT DURING THIS PERIOD

Start of letter.

---

(Your home address)

Date

To:

Dear Sir/Madam

Account No:

You have contact me/us regarding the account with the above reference number, which you claim is owed by me/us.

I/we would point out that under the Limitation Act 1980 Section 20[1] "no action shall be brought to recover (a) any principle sum of money secured by a mortgage or other charge on the property (whether real or personal)...after the expiration of twelve years from the date on which the right to receive the money accrued".

As the last correspondence/payment or acknowledgement of this debt was made over 12 years ago and no further acknowledgement or payment has been made since that time I/we suggest that you are no longer able to take any action against me/us to recover the alleged amount claimed.

I/we would further point out that the Council of Mortgage Lenders (CML) has agreed that with effect from 11 February 2000, anyone whose property was repossessed and sold and has not been contacted by their lender within six years of the date of sale, will not be asked to pay the shortfall. Whether or not you are a member of the CML, I/we consider this policy to be an indication of good practice and urge its adoption.

I/we would also point out that from 31 October 2004 The Financial Services Authority (FSA) has issued ' The Mortgage: Conduct of Business Rules' which say that if a lender decides to recover a mortgage shortfall debt they must make sure the borrower is informed of this within six years of the date of the sale.

I/we await your written confirmation that no further contact will be made concerning the above account and confirmation that the matter is now closed.

I/we look forward to your reply.

Yours faithfully

(Yours Signature)

iolanthe07

any principle sum of money

Sorry to be pedantic, but that should be principal, not principle. You might as well get it right - they will take you more seriously if you don't commit grammatical solecisms.

bobby6brown

Am I missing the point? Why do I need to do anything if they have no claim?

fermi

iolanthe07 wrote: »

any principle sum of money

Sorry to be pedantic, but that should be principal, not principle. You might as well get it right - they will take you more seriously if you don't commit grammatical solecisms.

I hadn't noticed that one!

The person who drafts the sample letters for National Debtline seems to be prone to mistakes like that. :rolleyes:

One of the others states:

The OFT Debt Collection Guidance states further that "continuing to press for payment after a debtor has stated that they will not be paying a debt because it is statue barred could amount to harassment contrary to section 40 (1) of the Administration of Justice Act 1970".

Statue?:rolleyes:

My grammar can get a bit flaky on a forum, but not (I hope) when drafting an important letter.

MrsTinks

bobby6brown wrote: »

Am I missing the point? Why do I need to do anything if they have no claim?

Because otherwise they will continue to phone you, write you and even turn up on your door step... If on the other hand you show them you are aware of your rights then 99% of them back off