Creditor letter

s1985 · 6 December 2017 at 11:05AM

Hi, after numerous back and forth correspondence with a creditor over the last 5 years regarding a mortgage repossession shortfall they have written to me stating they are going to take action in the next 60 days if nothing is sorted with payments.
One of the options mentioned is to "take legal action to obtain payments direct from your salary" - am I right in thinking this can only happen after a CCJ is obtained, payments are not made and so an attachment of earnings order is granted?

Second question - I'm in between a rock and a hard place with the shortfall as any insolvency or CCJ, etc is likely to cause me to lose my job as I work in financial services. The creditor doesn't know this currently so is it worth mentioning this to them? I could start making token payments which may or may not stop action for a while but I'm concerned that interest, etc will be added so the shortfall will never actually decrease and so I am just delaying the inevitable.

Thanks

[Deleted User] · 6 December 2017 at 11:07AM

If your job depends on you not having a CCJ, then a) definitely don't tell them that and b) start making at least token payments.

s1985 · 6 December 2017 at 11:21AM

Deleted_User wrote: »

If your job depends on you not having a CCJ, then a) definitely don't tell them that and b) start making at least token payments.

Cheers, what was your thinking behind answer a) as I was just thinking that this may not make sense to the creditor as with no job I have no money to pay anything. If a CCJ was on the cards I would may as well go bankrupt which would lead to the same outcome but with the debt written off. I have no assets.

National_Debtline · 6 December 2017 at 1:31PM

Hi s1985

For the same reasons you give above, I too would suggest that, if anything, it makes more sense for you to make the creditor aware of the adverse effects any CCJ would end up having - both on you and on their ability to recoup any money from you. It wouldn't be rational for them to choose a course of action that would backfire on them.

First of all, though, I'd suggest that you investigate in more detail exactly what the effects of any court judgment/insolvency would be. "Financial services" is a very broad term and it doesn't automatically follow that no one working within that field is allowed any degree of financial difficulty. Are you employed or self-employed?

Dennis
@natdebtline

s1985 · 6 December 2017 at 1:57PM

National_Debtline wrote: »

Hi s1985

For the same reasons you give above, I too would suggest that, if anything, it makes more sense for you to make the creditor aware of the adverse effects any CCJ would end up having - both on you and on their ability to recoup any money from you. It wouldn't be rational for them to choose a course of action that would backfire on them.

First of all, though, I'd suggest that you investigate in more detail exactly what the effects of any court judgment/insolvency would be. "Financial services" is a very broad term and it doesn't automatically follow that no one working within that field is allowed any degree of financial difficulty. Are you employed or self-employed?

Dennis
@natdebtline

Hi Dennis,
I'm employed in Insurance, my employment contract doesn't allow it & it is likely my qualification membership would become void too. I can investigate this in more detail as you suggest though.

With token payments does a creditor typically charge interest on top of the balance basically negating any payments made?

sourcrates · 6 December 2017 at 7:10PM

s1985 wrote: »

With token payments does a creditor typically charge interest on top of the balance basically negating any payments made?

A mortgage shortfall is regarded as an unsecured debt.

The creditor cannot add further interest or charges, unless the original agreement allows them to do so.

You may want to check your paperwork to see what it says.

National_Debtline · 6 December 2017 at 7:15PM

Hi again

Thanks for clarifying re: the employment situation - it's just worth knowing exactly what is/isn't at stake in your dealings with this creditor.

Where a mortgage shortfall is concerned, the debt will typically have "crystallised" i.e. frozen upon repossession and the subsequent sale. So no, I wouldn't normally expect to see a debt of this nature gathering any fresh interest now.

Have there been any indications in your correspondence with them that they are trying to add anything to the balance?

Dennis
@natdebtline

fatbelly · 6 December 2017 at 7:38PM

Keep this in the back of your mind: if they start a court claim you can avoid a ccj with a Tomlin Order

https://www.stepchange.org/debt-info/debt-collection/tomlin-order.aspx

Mortgage shortfall debts are not usually pursued aggressively, and get the best (often <20%) full & final settlement deals because they are often large, and owed by non-homeowners who have multiple debts and general financial chaos, and who often go bankrupt.

I would not let them know that you are not in that group.

National Debtline have an impressive suite of letters relating to mortgage shortfalls, all linked to here

https://www.nationaldebtline.org/EW/factsheets/Pages/mortgage-shortfalls/mortgage-debt.aspx

s1985 · 6 December 2017 at 9:49PM

National_Debtline wrote: »

Hi again

Thanks for clarifying re: the employment situation - it's just worth knowing exactly what is/isn't at stake in your dealings with this creditor.

Where a mortgage shortfall is concerned, the debt will typically have "crystallised" i.e. frozen upon repossession and the subsequent sale. So no, I wouldn't normally expect to see a debt of this nature gathering any fresh interest now.

Have there been any indications in your correspondence with them that they are trying to add anything to the balance?

Dennis
@natdebtline

Thanks, can't find anything to suggest that interest may be added as such but there was mention in one letter of fees & charges that may be added if they outsource the account to a debt collection agency.

s1985 · 6 December 2017 at 10:08PM

fatbelly wrote: »

Keep this in the back of your mind: if they start a court claim you can avoid a ccj with a Tomlin Order

https://www.stepchange.org/debt-info/debt-collection/tomlin-order.aspx

Mortgage shortfall debts are not usually pursued aggressively, and get the best (often <20%) full & final settlement deals because they are often large, and owed by non-homeowners who have multiple debts and general financial chaos, and who often go bankrupt.

I would not let them know that you are not in that group.

National Debtline have an impressive suite of letters relating to mortgage shortfalls, all linked to here

https://www.nationaldebtline.org/EW/factsheets/Pages/mortgage-shortfalls/mortgage-debt.aspx

Thanks, interesting to know about tomlin orders. Hopefully it will not get to that stage.

I have tried a few times for f&f settlements but only 10%, I think I could get to 20% so I'm going to write to them with an offer of monthly payments (which will be low based on disposable income) or 20% and see what they say.

s1985 · 6 December 2017 at 10:39PM

sourcrates wrote: »

A mortgage shortfall is regarded as an unsecured debt.

The creditor cannot add further interest or charges, unless the original agreement allows them to do so.

You may want to check your paperwork to see what it says.

Thanks, having checked the paperwork its not overly clear be honest. I did however find a letter just prior to repossession that stated that they reserve the right to charge interest on any shortfall, so presumably they feel that they can within the terms - although this hasn't happened to date (about 5.5 years now since the repossession)

Creditor letter

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