Response to When is 'Contact' actually made?

The 'six year rule' is actually a voluntary code, and so the lenders have made up their own rules to suit their own interests. Thus, 'contact' for them equates to the act of simply sending out a letter. They say that if they make contact or 'begin proceedings' (again, for the lenders, this simply means the act of sending out a letter, which I think is a moot point) within 6 years of selling a repossessed property, then their pursuance of a claim is in accordance with the Mortgage Lenders' code. The lenders claim that they actually in law have 12 years to pursue a mortgage shortfall 'debt'. Whether this is really true or not remains to be tested in the Court of Appeal. It was due to be tested earlier this year, but Abbey National settled with the couple involved (the Holmans) and paid their costs. As the Holmans were on legal aid, they had no choice but to go along with this. This was a shame, because as a result the Limitation on shortfall remains a grey area of law. But it is of interest that the Law Commission is reviewing the Limitation Act; and the Law Society recommends a period of 3 years for creditors to chase alleged debts. The Human Rights Act also requires that civil hearings be brought within a 'reasonable time'; one would imagine that lenders' undue delays in starting proceedings might arguably be 'unreasonable'.

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