after seven years plus national home loans debt collectors wring my wife telling her they want 2500 pounds to settle a debt of 16000. they have not contacted her since my bankrupcy in 1996, they were given possesion and sold we think for around 20000 less than we were asking when we had a joint mortgage, although they claim to of sent many letters over the years to various addresses(they are lying she has had none.)she has told them she has no money or any assetts. I dont know if they subscribe to the mortgage code (ie agreement not to chase debts after six years). she has no need of a mortgage or credit is it worth her declaring bankrupt. or any better suggestions please?

-- david brown (david@dbeb.freeserve.co.uk), September 17, 2003

Answers

David,

Take a look first at my posting in reply to Natasha under "Should I pay up??" about 13 postings back dated 9th Sept. I would follow the advice under the "Do's & Don'ts" on the Repo site, e.g. Sarn the lender and put them to strict proof of the alleged debt. Be very very careful not to acknowledge the debt, otherwise you will restart the limitation period, follow the advice already given regarding this, i.e. always state on every communication that you do not acknowledge the debt & that you deny liability. I would not suggest bankruptcy at this stage. NHL/Paragon are members of the CML 6 year voluntary code. You really don't give enough info for us to give you further suggestions. Good Luck.

Mark.

-- M Amos (idgroms@hotmail.com), September 18, 2003.

I wrang cml they told me mortgages prior to july 1997 were not covered by the code. so does this mean a lender even though they subscribe to the code can do as they please when it suits them.

-- david (david@dbeb.freeserve.co.uk), September 18, 2003.

Hi David,

This is what the CML Website has to say about it:

However, lenders are committed to fair and sympathetic treatment of people who have suffered repossession, and accept that individuals should not face long delays before lenders contact them to discuss repayment of the shortfall. Where a forwarding address is known, most lenders will contact borrowers fairly soon after possession with a view to agreeing a manageable arrangement for repaying all or some of the debt.

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.

Does this time limit apply to every case?

The new time limit does not affect anyone who is already -

adhering to alternative payment arrangements for the shortfall debt; or

who has already been contacted by the lender, even if the initial contact was made with them by the lender after six years from the date of the sale of the property in possession. The six year limit only refers to beginning recovery action and does not affect a lender's ability to recover the shortfall debt over a longer period. If there is evidence of mortgage fraud, the new time limit will not apply.

Following the sale of a property in possession, lenders often find it difficult to contact the former borrower to advise them of any surplus monies or shortfall debt. Lenders use a variety of measures to identify where the individual is now living. This might include using tracing agents. Situations can arise where a lender or its third party agent is trying to contact the individual (for example, by letter or telephone) to discuss repayment of the shortfall, but the individual simply chooses to ignore such contact. This is despite the fact that the contact is being made at the individual's new address. In these cases, lenders will consider that contact has been made for the purposes of the new six year limit. If an individual is unclear whether contact has been made within the six year period, the lender will be able to confirm the position.

So in other words they can (by CML's own website's admission) contact you after 6 years.

As Mark says follow the Do's & Don'ts - good luck and the Home Repo site is a great source of support.

-- Chris (chris@anon.co.uk), September 19, 2003.

David,

I would email the CML and ask them exactly where on their website it says that mortgages prior to july 1997 were not covered by the code.

Mark.

-- M Amos (idgroms@hotmail.com), September 19, 2003.