I'm sorry Avril, but I can't give you any more information than you will find posted here in recent discussions on the subject of 6 / 12 year limitation rules.(posted 7971 days ago)The 1980 Limitations Act is the key piece of legislation here, and article 5 (I think) sets a six year limit to attempts to recover debts arising out of contracts. An insurance policy is a contract between the insurer and the insured and despite what the lenders would have us believe there is a strong argument that a MIG policy is no different from any other insurance policy.
The major problem here is that there has not yet been a definitive ruling on this precise question, although there have been several cases that almost settled it.
As many (perhaps the majority) of shortfall claims involve a portion of MIG policy payouts being chased under subrogation rights by the lender on behalf of the insurer (despite the fact that the lender will only pay the insurer a fraction of any monies recovered), and many of these claims are now beyond the six years from the point at which the 'loss' was known, you can see that the status of MIG payout as a simple or specialty debt is an extremely important issue.
I don't know if the upcoming cases due to be heard in the court of appeal in July will have any bearing on the situation. What it would seem to need is for either a class action to be brought to establish a point of law on simple v specialty debt for MIG payouts, or else a single case in which a judge will rule on this issue.
If you think that you might be in the category of someone whose shortfall debt is partly made up with MIG payout being claimed under subrogation rights, and if the six years from the point at which the debt arose has elapsed, then you may decide that you can reject at least part of the shortfall claim on the basis that it is partially statute barred.
Ultimately it will be up to the lender to decide whether or not to pursue you through the courts and risk this issue being decided to their disadvantage. Perhaps this is the main reason why no definitive judgement has yet arisen.