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Response to nhl still chasing after 10 years UPDATE

from Guy Skipwith (guy@skipwith107.freeserve.co.uk)
A bit late but better than never

Under the LA 80 time runs from the date of the 'accrual of the cause of action'. This is the date from which the lender could first take court action. This is usually the date of the first missed payment. It doesn't matter that the creditor didn't know that it could sue unless this was dishonestly concealed by the debtor (e.g. hacking into the Abbey's computer (dream on)).

Time can start to run afresh whenever a debt is acknowledged in writing or a part payment is made during an existing limitation period. An ackn or pt paymt made after the expiry of a limitation period has no effect. The debt is already statute barred.

An acknowledgmet only binds the person who makes it but a part payment binds all other joint debtors.

The Court of Appeal will decide whether a shortfall debt is a simple contract with 6 year limitation period or a specialty with a 12 year period.. I think it is inevitable that they decide 12 years (Barclays Bank v Beck and Nat West bank v Kinch) but who knows.

Remember some mortgages have 'shortfall covenants' in them under which the borrower specifically covenants to repay any shortfall debt. If there is such a covenant, time will start to run from the date of the sale of the ppty (whether it be 6 or 12 years). It's quite OK for a lender to have 2 seperate causes of action in relation to one debt.

Hopefully the CA will sort-out the shortfall issues relation to MIG claims - can you argue 6 years on the basis that the contract of insurance (the MIG) is a simple contract, or does the MIG insurer take over whatever rights the lender had? We'll have to wait and see.

Fingers crossed

Guy

(posted 7955 days ago)

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