basically my husbands home was repossessed in 93. He is currently in contact with the lender and they are constantly asking for an I&E form which he has so far refused to provide. Problem is, most of his salary goes into my account to pay all the household bills and on top of that, I have quite a good income and we dont have children. We already have a few debts as most households do but also, my account is with the lender that is chasing my husband.

Does anyone have any experience of whether they will also consider me and my income when asking for payment? I had nothing to do with the original debt - I hadnt even met my husband when it all happened.

If they just considered my husbands salary, we might be able to manager a lump sum pay off but I dont know whether they will try to drag my earnings into it.

-- anon (anon@anon.com), June 10, 2002

Answers

I'm no legal expert but I think under English Law your assets would be at risk due to your married status. I would suggest you seek legal advice on this. So far from what you say your husband has refused to acknowledge the debt. I hope that he is also following the excellent advice on this site about putting the lender to strict proof of claim.

If I were in your shoes I would close my account with your lender and open another one elsewhere. Even though they probably already know what you earn / spend in round terms there's no point making it easier for them is there?

As to the question of settling with them, you should first try to see how their claim is made up. If your mortgage predates 1989 and you had a MIG policy which was redeemed by the lender, then a portion of their claim may already be statute barred, although as you will see by looking at recent postings, this has yet to be definitively judged to be the case.

It sounds from what you tell us of your circumstances that you would be able to settle for a reduced amount, but the trick is how to achieve a realistic settlement with lenders who tend to continue to ask for I&E forms to be completed.

-- Gordon Bennet (arsenewhinger@hotmail.com), June 10, 2002.

You can pretty much guarantee that the lender will want to include your earnings when you try and negotiate a settlement. You can quite rightly argue that the shortfall is nothing to do with you and you should fight any attempt to include your income and assets (including the family home) when dealing with the lender.

Lenders can be very sneaky and demand that you must give details of your income as well, even more so when you've got the CAB acting for you. Most of the time, respossessees hand over the information about their spouse as they've no idea that they don't have to. Lenders and their solicitors can be very scary over this and give the impression that you're obliged to tell them what they want to know.

Do as previously advised and open another bank account in your own name and have the salaries of you and your husband paid into it. You can even arrange for your husband to act as an 'agent' on your account and be able to sign cheques on your behalf if he wants to.

Unfortunately, lenders don't seem to play fair when dealing with shortfalls and they will insist that you must complete their I&E forms. What your husband should do is get a full justification of every penny which they are claiming. There are sample letters and advice on what to look for and question elsewhere on this website.

This alone can take a long time, but it is usually well worth it and you may be able to negotiate a smaller settlement figure. If you can arrange to pay a lump sum rather than installments then all the better, as lenders may come back later trying to increase payments and asking for further information on your financial situation.

If you do negotiate a lump sum settlement then make sure you get an agreement written up by a solicitor (chosen by you) and make sure that it is in full and final settlement of any claim or future claim which the lender or their agents might have against your husband.

Good luck

-- pendle (pendle_666@yahoo.co.uk), June 10, 2002.

"As to the question of settling with them, you should first try to see how their claim is made up. If your mortgage predates 1989 and you had a MIG policy which was redeemed by the lender, then a portion of their claim may already be statute barred, although as you will see by looking at recent postings, this has yet to be definitively judged to be the case. "

dear gordon,

could you tell me a little more about this please?

tia, avril

-- avril smith (av@totalise.co.uk), June 21, 2002.

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.

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.

-- Gordon Bennet (arsenewhinger@hotmail.com), June 24, 2002.

Anyone know what this case is about?

Skipton Building Society v Bratley and another

Looks vaguely relevant to this 6/12 year point from the summary sheet, but is it same Skipton BS case we already know about?

-- Too scared to say (iwasduped@yahoo.com), June 24, 2002.