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Response to Can I be chased for debt after repossession?

from M Amos (idgroms@hotmail.com)
Andrew,

I think you have got a little confused on a few points. Firstly, you say "if I do not contact the solicitors at all, they may drop this as it is probably approaching 6 years since I had contact with the building society", the CML 6 year voluntary code runs from the date of SALE of the repo'd property,, which can often be a substantial period after repossession. It also depends on whether the lender is a member of the CML, this you would need to check. The CML say:

In addition, from 11 February 2000, lenders who are members of the Council of Mortgage Lenders have agreed voluntarily that they will begin all recovery action for the shortfall within the first six years following the sale of a property in possession. Anyone whose property was taken into possession and sold more than six years ago, and who has not been contacted by their lender about recovering any outstanding debt will not now be asked to pay the shortfall. The Association of British Insurers supports this approach on behalf of the mortgage indemnity insurers.

See the CML webpage: http://www.cml.org.uk/servlet/dycon/zt- cml/cml/live/en/cml/pub_info_dept

The two following companies are CML "Associate Members"

Countrywide Assured Group plc

Countrywide Legal Indemnities Ltd

Furthermore, a lender has 12 years to chase you under "Bristol & West v Bartlett, usually from the 2nd or 3rd missed mortgage payments, but you need to check the mortgage terms and conditions to be sure. See also my recent posting "The 12 Year Limit and Endowment Mortgages". If a Money Judgement Order was obtained by the lender from the court, tnen, in theory, a lender can chase you indefinitely.

If I were you, I would read as many postings as possible on the repo Q&A site and the Home Repo Do's and Don'ts. Put the lender to strict proof of the alleged debt. SARN them, I have a SARN letter if you like. "Discovery" can be applied for if a case goes to court and is a mutual exchange of evidence and all relevant information held by each party relating to the case.

As you say you are heavily in debt and have no assets you should consider insolvency as an option, this would leave you debt free and give you a fresh start. Under the new Enterprise Bill coming in next year discharge after bankruptcy will much quicker - 12 months or less from date of implementation. There are already transitional arrangements in place. It currently costs £390. It might be worth offering this amount first to the lender as a full & final settlement after they have been put to strict proof, but this, of course, depends on your overall financial situation. I would talk the options through with a professional adviser (which I am not), for example, the NAMV, the Mary Ward Legal Centre or a local CAB (but find someone experienced in shortfalls). If you do go for settlement make sure any third party is included e.g. insurance company. Be very careful not to acknowledge the alleged shortfall (see previous postings), any offers should be made "ex gratia" with "Without prejudice" written on the letters. If the mortgage was a joint one, be careful that the partner/s haven't acknowledged the debt by means of a part payment.

All this of course will have an adverse affect on your credit rating and will affect your ability to obtain a new mortgage in the future.

Hope this is useful. Good Luck.

Mark.

(posted 7520 days ago)

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