12 years could be forever....

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I didn't know this untill today, but 12 years CAN BE FOREVER!!! As soon as a contact attempt is made, the clock is set again for another 12 years...


-- Gennie Blackman (gennie1234uk@yahoo.co.uk), October 16, 2001


No it isn't. There is a Statute of Limitations on specialty debts - a mortgage is one of these at it's inception, but can change in full or in part depending on how it is treated upon default. In general, the specialty debt can only be pursued for 12 years from either the repossession order, if applicable or date of sale, whichever happens first. The voluntary six year code is another matter altogether. May we ask who provided this information?

-- Too scared to say (iwasduped@yahoo.com), October 16, 2001.

Yes - I've definitely been told the 12 years is a 'rolling' period too...and have been living under the assumption that I will NEVER be able to own my home as effectively they only have to write 3 more letters at 12 year intervals to keep their end of the bargain. So PLEASE somebody with in-depth legal knowledge explain how and why if this is wrong. I can't now remember where I first heard this one, but it certainly convinced me at the time (and still does).

-- Melody (mbc109@york.ac.uk), October 17, 2001.

IF you look at the law you will see that there is no way that it can be a rolling period. If all that needs to be done is a letter written, or as the lenders seem to say, procedures commenced, then all they would hav etc do is open the file to look at it every 12 years.

This type of exercise would then be okay for all other cases brought in this country and therefore the legal system would be in a right old mess as no case could ever be closed.

If this is how the law works then those who created it are certainly not from Vulcan!!

I understand that if you admit liability then a new period MAY begin from that date. Therefore, always add to all letters theat you dispute their claim. Therefore there is no acceptance, the clock is running and sooner or later they have no choice but to go away for good.

-- Matt (mattyc@ntlworld.com), October 17, 2001.

Why not accept the debt, then file for bankruptcy. This way they do not get their money and two years later your home free as the cannot pursue it again at a later date!

-- Daren Otsay (darenotsay@blueyonder.co.uk), October 17, 2001.

Well I suppose it is an option but not one that I would EVER recommend. Bankrupcy is a very serious thing to have against you and it will effect anyone who is connected personally with you and can even lose you your job and make getting another one more difficult.

An option but IMHO not a good idea.

-- Matt (mattyc@ntlworld.com), October 17, 2001.

I concur with Matty - Banruptcy is not to be considered except as a method of last resort. Also, you cannot go Bankrupt automatically - if the courts think you are doing this as a means of evading your debt, rather than because you genuinely ARE bankrupt they will take a very dim view of it - they would almost certainly refuse the Banruptcy petition, and make you pay costs (so you're worse off !).

If you are really serious about this, then go and see someone who specialise in Bankruptcy and prepare for a few years of sheer hell. You will feel as though you can't even go to the loo without asking someone first. No credit, you'll probably lose your bank account and be given one with limited facilities. No overdraft. No holidays. No nothing.


-- Chris (chrsh@hotmail.com), October 17, 2001.

When we went to the CAB for advice, they informed us that the 12 year limit started EVERY time the building society or debt collectors wrote to us. We were informed that if we didn't resolve the matter, we could end up taking the debt to the grave. One option the CAB gave to us, was to go bankrupt (By the way, if it's a joint mortgage, you both would have to go bankrupt),However in our case that would have meant losing our new home. Needless to say, we declined the CAB offer, and we are now taking the advice we have got from this site, If nothing else, at least now we have hope. We would also like to take this opportunity to thank everyone who has contributed to this site. Thanks.

-- dave carpenter (dcarpent@globalnet.co.uk), October 18, 2001.

i think its worth reading an earlier posting to this board, see "when is 6 years really 6 years." Lots of useful insights and thoughts there.

My chasers have told me that they have 12 years. They have also said that by law they only needed to make contact before six years from the date of sale.

I am very dubious about this because they lied about the date of sale, and also refuse to tell me the date that the MIG was paid out. AND they won't send me my SARN.

I believe that there is a strong possibility that once the MIG is paid the debt becomes a simple debt and they only have 6 years to recover it. I would also guess that in my case they have gone over the 6 years...I intend to find out.

-- (_Believer14@excite.co.uk), October 19, 2001.

In reply to Dave Carpenter I would love to be in a court when I am very old and grey having a case heard that goes back in time 60 years. I don't think there would be any paperwork around by then and I am sure that the judge would take one look and ask why it has taken so long. Whatever the reply I am sure the case would be thrown out.

-- Matt (mattyc@ntlworld.com), October 19, 2001.

And I bet the judge would still be able to call you "Young Man"

-- Jon S (jks_uk2001@yahoo.co.uk), October 19, 2001.

We had a very interesting debate about the MIG and the payout changing the nature of the debt a while back - I am 100% sure that the MIG payout is a debt simple and that unless the remaining balance reverts in full to the original Lender for collection, entitlement to specialty debt status is forfeit. Debt collection agencies/factoring companies and such buy these debts, they must become debt simple when they are sold to them, in my opinion. They would then be subject to the six year rule from the date they were sold, unless previously covered bu a MIG payout and then the clock would already be ticking on that proportion. For tax purposes only the original supplier of the mortgage can claim bad debt relief in their statutory accounts...this is inextricably linked with the issue of supply..i.e between which parties was the original supply made...therefore this impacts on contract etc. The original Lender has 12 years from the date of sale etc to chase the part of the shortfall which has not been covered by a MIG payout. The MIG payout proportion *has* to be debt simple and subject to the six year rule. We need a friendly lawyer to test this!

-- Too scared to say (iwasduped@yahoo.com), October 19, 2001.

If the mortgage was not covered by any MIG policy and the house was voluntarily repossessed and sold in 93, does that remain a simple debt? I interpret the above as 12 years, although I thought a repossession formed a simple debt and was therefore subject to 6 years? It looks like my BS may have sold the debt onto another agency, but somehow, its now transferred back to the original BS who are chasing me. I received my letter at 5yrs 11 months and 1 week like so many other unfortunate people, so they will not decline the chase as they say the CML ruling does not count here. I am trying to prove the 6 year simple debt rule against my case, but after reading this, I am not sure.....

-- (NOMORTGAGEDEEDS!@aol.com), October 22, 2001.

Try having a look at the Property Law web site, maintained by Gary Webber, barrister. If you go to http://www.propertylawuk.net/frameresidential.htm you will find a section called 'recovery of mortgage shortfall' which specifically discusses the 6 and 12 year limitation periods. He discusses the two main cases which are often referred to in this context, Hopkinson v Tupper (1997, Court of Appeal), and Global v Jones (1999, Chancery Division of the High Court).

If I might attempt to summarise what Mr Webber says:

Hopkinson v Tupper.

The Court of Appeal decided that is seriously arguable that where a lender has repossessed and sold the security (the property) and is seeking to recover the shortfall, the claim is in simple contract whatever the nature of the instrument under which the debt was initially secured. It is arguable that the limitation period applicable is 6 years. The county court judge should have found that the defendant had a seriously arguable case that much or all of the claim was statute barred. In fact the county court judge had struck out the case on the basis of inordinate delay, which was upheld by the Court of Appeal [take note, all those who are worried about claims being held over them for a lifetime!].

[What this has meant (unfortunately)is that the 6/12 year issue remains unresolved as a point of law in the Court of Appeal. But there are signs that lenders do not want to go there and argue the toss, which is interesting......]

Global Financial Recoveries v Jones.

The judge noted that the mortgage deed contained a special clause which allowed the original lender to pursue the shortfall for 12 years. The judge held that as this clause was actually part of the mortgage deed any claim based upon it was an action 'upon a specialty' so that the 12 year limitation period applied.

[Here comes the really interesting bit.] In fact the claimant was an assignee of the debt. Upon the facts of the case the judge found that only the benefit of the underlying loan contract had been assigned and not the benefit of the condition of the mortgage. The claim was therefore based upon a simple contract and the 6 year rule applied.

[This is potentially significant IMHO because quite a lot of people who read this page are being pursued *not* by the original lender but by a compnay who have had the 'debt' assigned to them.]

-- E Scott (eleanor.scott@btinternet.com), November 16, 2001.

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