Part payment and the other party - Mark Amos

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Mark,

Could you clarify this point for me please. A husband and wife take out a mortgage, they have the property repossessed in Sept 1995, and then separate a year later. The lender traces the wife and harrasses her into making monthly payments, although she completely denies the debt on the grounds that:- 1. the lender sold the MIG to the borrowers under fraudulent circumstances. 2. The lender undersold the property by at least 10K. 3. The lender updated the MIG after repossession, paying the difference of the higher premium themselves, but added the full amount claimed to the "shortfall debt" of the borrower. 4. The lender refuses to supply a copy of the MIG and Mortgage Deed, . 5. The borrower believes that not all documents were produced in response to a SARN, and feels certain that some relevant paperwork was deliberately with-held.

The wife stops the monthly payments and asks the lender to prove their shortfall claim, with proof by means of invoices, relevant paperwork and bank statements. After a lot of to-ing and fro-ing of letters, the wife offers the lender 500 pounds, which the lender immediately accepts (still without proving the debt in any way) and the money changes hands, along with a letter from the lender stating that they will now persue the husband for the balance.

From your point, although the 12 year limitation period would expire in Nov 2007 (12 years from 2nd default on the mortgage), through the wife having paid 1100 pounds towards the alleged 30K debt, the husband would now be soley liable for 28900 pounds for another 12 years from the date the cheque was cashed. So if he enters into correspondence with the lender, they have ANOTHER 12 years in which to make up more lies and get other parties to write letters to substantiate their fairy tales. Is this correct? And if so, how does the 6 year Mortgage Council "Amnesty" stand?

Tracey

-- One Angry Mother (madcow678@hotmail.com), January 20, 2003

Answers

Tracey,

Your case does seem complex, I think you should really seek advice from a lawyer. However, I have been given a few pointers ,and questions you should consider which I hope will help:

Do the monthly payments that you made amount to payments in respect of the debt? If you were denying liability all the time , could it be argued that they were 'ex gratia' payments? If you were completely denying liability for the debt it is arguable that this is the case. It may be, however, looking at your denial 'in the round', that it amounted to a dispute about the amount of the debt rather than a denial of any liability. If this is the case, it could be argued that perhaps that they were only payments in respect of limited liability.

It's possible, however, that they would be taken as payments in respect of the debt and thus have restarted time.

The full and final payment is certainly a payment in respect of the debt unless it was specifically stated that it was being made in spite of a complete denial of liability - if this was the case, it is arguable that it was ex gratia ( I don't admit I owe you anything but I will pay you something anyway).

If the full and final was not expressed in these terms, the 500 will have been a payment in respect of the debt and will have restarted time running afresh against the ex-husband, and they'll have another 12 years to get him for the full balance owing 28,900. If he acknowledges or pays, yes , that'll start another 12 years.

CML 'amnesty' or agreement - when was the date of sale? If there has been no contact by the lender with the H within 6 years of the date of sale, they should not pursue him, ragardless of contact with or payment by W. This might apply to H.

Hope this helps, Mark.

-- M Amos (idgroms@hotmail.com), January 21, 2003.


Hi Tracey & Mark,

I was advised by a Barrister that a part payment made by one or other of the debtors does not constitue an acknowledgement for both parties. I investigated this because my fiance's ex-wife has been paying since 1997 and was worried that the time limit would start running afresh even though my fiance has never paid towards, or acknowledged the debt.

She advised that a part payment from her does not constitute an admission from him otherwise you could blackmail your ex by saying you were going to pay and drag him/her down with them.

It's all very confusing but we are sticking to 12 years which ends middle of next year - our lawyer agrees with this too so fingers crossed.

-- Chris (chris@anon.co.uk), January 21, 2003.


Chris,

That's interesting. Your comment regarding the barrister reminded me of an article I read a long time ago, which I really should have recalled earlier, particularly as it deals with joint liability. One does, however, tend to recall things pertinent to oneself. Anyway, the article in question is by another barrister 'Jeremy Callman' in which he backs up the info given to me by the solicitor mentioned previously. Mr Callman backs up his argument by quoting the Limitation Act 1980, in particular ss 31.6 and 31.7, see below:

(6) An acknowledgement of any debt or other liquidated pecuniary claim shall bind the acknowledgor and his successors but not any other person.

(7) A payment made in respect of any debt or other liquidated pecuniary claim shall bind all persons liable in respect of the debt or claim.

Mr Callman also quotes s 29.7 of the same Act. (You can find the Limitation Act 1980 on 'http://www.lawcom.gov.uk/library/lccp151/cp151apa.pdf'

It does seem quite clear to me. You can find the article on 'http://www.home-repo.org/documents/limitations.doc' I would be interested to hear what legal argument the barrister you mention has to support what he has told you.

Mark.

-- M Amos (idgroms@hotmail.com), January 21, 2003.


Chris,

I forgot to mention the relevant part in the article comes under the title 'Restarting the clock'.

-- M Amos (idgroms@hotmail.com), January 21, 2003.


Hi Mark,

The barrister told me that the wording is very bad. For example were his ex-wife (chance would be a fine thing) to win the lottery and pay off the whole debt they would be jointly cleared but a part payment means that they can chase the other party for the whole amount.

If time were to start running afresh for the other party then if you had a particularly nasty ex they could deliberatly make a payment to start time running or blackmail that person likewise.

My fiance has stuck to her advice re Bradford & Bingley and it appears they are indeed treating us separately despite her making payments so we are hopeful. We have quoted that his ex had admitted liability separately and they have not advised otherwise. Indeed quite the reverse in that they are now taking 6 months and more to reply and then he gets the same letter and we start again!!

Hope you see what I mean.

-- Chris (chris@anon.co.uk), January 21, 2003.



Chris,

I can only state what has been said by the NACAB solicitor and the barrister Jeremy Callman. It may well be your barrister is right, I hope so. Good Luck.

Mark.

-- M Amos (idgroms@hotmail.com), January 24, 2003.


Thanks Mark, we hope so too. As it is we are keeping everything in my name. I have a friend whose fiance at that time spent the mortgage money. She made a small full and final settlement and has since re-married someone else. She advised that she keeps everything in her husband's name as everytime they do anything the shortfall always pops up and she has to produce the letter they gave her acknowledging it was a full & final settlement. These financial institutions are a nightmare and make so many people's lives a misery I don't know how the people who chase sleep at night.

-- Chris (chris@anon.co.uk), January 27, 2003.

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