Secured loan not on credit file

alioroy · 30 October 2019 at 9:06PM

Hi -could anyone advise
We had a business (ltd company) which closed in 2010 and as a result we declared bankruptcy in 2011. Everything went 'smoothly' -we used CAP, then an Insolvency Practitioner and finally the OR was involved. We were discharged from BR in 2012 and got to keep our home by buying back the interest in the house from the Trustee for £196 in 2015 (we also paid the mortgage during that time).
We have spent many years building up our credit rating which is now excellent. As a result we applied for a remortgage deal with a different bank to avail of a better rate. We were accepted for the mortgage, however the solicitor found a charge on our home with HSBC from 2009. We had a business account with HSBC, however assumed that this charge was erroneously in place. As a result I phoned HSBC in September to asked for it to be removed. No-one could find our details and finally after several phonecalls and a recorded delivery letter to HSBC asking for the charge to be removed I received a call 1 month later to say that the charge is still on the house because there is money owed from an overdraft and another account. The principal sum was apparently a combined amount of approx 15k from an OD and loan.

I challenged this debt, explaining that we went through BR so CAP/IP/Or were dealing with any correspondence. Furthermore, there has never been anything on our credit file and finally we have not heard anything from the bank since 2010. Indeed the only way we became aware of this was when the solicitor was looking at a remortgage. The guy at HSBC said that they sent us a letter in 2011. He then sent a copy of this letter. At the time, as instructed we would have passed all correspondence (including this letter) to the IP/OR as we were mid BR and would have been told not to deal with any creditors. The letter in 2011 asks for a payment plan and says they will pursue debt collection agency or a solicitor if they don't hear from us in 14 days.

I realise that ignorance on our part is no excuse , however we trusted the process and had no idea that there was money owing against a charge after we bought back the interest in our house. If we had of we could have done something far earlier instead of letting the interest on this debt build up.

I feel we have been deprived of the opportunity to pay this debt back both in terms of it not being on our credit file and also HSBC having not been in contact. Are we in any position to negotiate a reduced full and final settlement figure with them or go to the Ombudsman with regards to due process not being followed on the part of the bank?

We are not trying to shirk financial responsibility, just that there has to be accountability on the part of the bank given it is a big company with a legal department and there was no way we could have been aware of this only that we remortgaged. Indeed, if we had not have tried to move lenders it might have been years before this surfaced, accumulating even more interest.

Thanks for any advice

Minkym00 · 31 October 2019 at 1:41PM

This needs to be challenged on the basis that it was a pre-bankruptcy debt and therefore vested in the bankruptcy. The OR should have informed HSBC of this at the time when you passed the letter on. You would therefore not have had any liability for the debt when the charge was placed on your property and it was therefore applied erroneously. Have you still got a copy of your bankruptcy order?

Both the account and the loan should have shown up on your credit file at the time, unless you opened the account and took out the loan under a different address. It doesn't make any difference, you are still not liable, but it might explain why it was missed.

It's worth getting some legal advice.

Minkym00 · 31 October 2019 at 3:50PM

Also, you’ve titled your post ‘secured loan’. A secured loan wouldn’t vest in your bankruptcy. But your post certainly gives the impression that a charge was put on due to an unpaid unsecured loan. Can you please clarify?

alioroy · 31 October 2019 at 4:22PM

Thanks for the replies. The charge was put on our house in 2009 when we signed up for secured business borrowing. I have asked HSBC for the paperwork which I believe were personal guarantees but I can't remember as we handed everything to the OR. My understanding is that secured lending wasn't included in BR, however because we handed everything over to the IP and OR who dealt with our limited assets we had assumed that anything had either been paid with our assets or written off.

To be honest, we weren't informed to keep paying this loan and in hindsight did not ask the question as to whether we still owed as we just handed everything over and did as instructed. As we haven't heard from HSBC (or another 3rd party on behalf of them or had nothing on our credit file we were unaware of this loan still being active)

Thanks

Minkym00 · 2 November 2019 at 4:43PM

Ahh ok, thanks for the clarification. Secured loans do not vest in bankruptcy so unfortunately you are still liable for the charge.

You could make the argument that you should have been advised to still pay it but I can’t see it getting you anywhere useful. You could try making an offer on paying back a reduced sum but they may well just say that they will rely on their security as they know they’ll get paid eventually.

Minkym00 · 2 November 2019 at 4:46PM

Sorry last post only posted half my answer.

Unless you have evidence that you were given wrong advice (I.e. evidence you were told to stop paying secured creditors) then I can’t see you getting anywhere with a complaint.

I can’t see any way out of this but hopefully other contributors will have some thoughts.

alioroy · 3 November 2019 at 12:38PM

Thanks again for replies - I appreciate it. We weren't given advice not to pay secured creditors -just to pass anything pertaining to all creditors over to IP/OR. We were of the belief that if after the sale of our minimal business assets and buying back the interest in our house that there were monies owing someone would have informed us. We are not pleading ignorance -just faith in the process as we didn't even have an IPA set up throughout the BR.

Under financial regulations do HSBC not have an onus to keep in regular contact or put this information on a credit file at the very least? It would appear that we have no legal recompense but have we been treated 'fairly' -or does that not matter as the legal charge trumps everything?

Minkym00 · 7 November 2019 at 9:57PM

Secured debts do not vest in bankruptcy so the OR/ IP would not have dealt with them unless your house was sold (which it wasn’t as you bought out the interest). Sorry but I don’t understand why you didn’t keep paying the secured loan, after all you still paid the mortgage. It’s not down to the OR/IP to tell you that.

Not all lenders update every the credit reference agencies, they should but they don’t. Have you raised a complaint to HSBC yet? There could be an argument that they should have done more to chase you for payment but, as I said previously, they may just rely on their security. It’s worth a go though.

Thrugelmir · 7 November 2019 at 10:39PM

Minkym00 wrote: »

Not all lenders update every the credit reference agencies, they should but they don’t. Have you raised a complaint to HSBC yet?

The debt was a Company loan, not a personal one. The "guarantee" is being called in. No requirement to report to the CRA's.

Secured loan not on credit file

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