Advice on making an offer : LUSENET : Repossession : One Thread

My house was reposessed in 1996, and I'm at the stage where I cant really wait any more before making ana offer. My family income is only 14k, but thinkgs are set to change this summer to about 34k, and we want to buy a house then. also my daughter will be starting a feepaying scholl and I'm worried th mortgage company can get a court judgment and force us to take her out of there so they can have the money.My questions are - 1. can they really do that?(school fees) 2. they say we owe then 40k.Whats a reasonble offer?(we haven't got any savings or assets) 3. I looked at the limitations act 1980 and I dont understand about arrears. section 20 part 5 says they cant ask forf them after 6 yrs from when they were due, but part 7 says they can ask for them for 6 years after the house is sold,I think. It makes a differene to me becuase its now more than 6 yrs since the reposession but less that 6 yrs since the house was sold.can anybody explain this please? thank you

-- Lenders Bane (, April 13, 2002


The amount of your offer will depend on your Lender's history to be honest. Some accept low amounts, such as 5-10% of the alleged shortfall, others won't accept anything less than half. Your change in circumstances is significant, and they may insist on a review of your finances in a few months before accepting a full and final settlement. School fees are considered non-essential and they will be disregarded in any disposable income calculation. You would not be able to justify being able to pay school fees and not the Lender I am afraid.A court would not be sympathetic to your plight either if this was presented to them. The Lender can get a money judgement order, and whilst they cannot physically force you to take your child out of private school, the bottom line is that their [alleged] debt has priority and you would probably not have enough money left to cover the fees. If you have been talking to your Lender since the repo, or if any contact has been made,they actually have twelve years from the date you were in default to chase you. The [alleged]debt is a specialty debt, and different rules can apply. Sorry to sound so gloomy, but unless you can get them to settle very quickly, you may have to rethink your strategy somewhat. I have assumed that you have disputed the amount claimed and that the true figure is much less - perhaps a low offer made after issuing a SARN might have a little more impact? Best of luck.

-- Too scared to say (, April 13, 2002.

Thank you. Ive read through the site -and more- and thats why I asked about the limitation act.The bit I mentioned is just about arrears -not about the debt itself- but about half of the 40k is arrears and interest on arears.If this isnt countd I can make a lower offer.

-- Lenders Bane (, April 15, 2002.

Yes, this is related to something I've been wondering about. I too thought that that part of the Limitation Act appears to deal with debt arising from mortgage arrears differently from the shortfall debt itself. I agree it looks like any portion of the debt arising from arrears should be unchaseable after 6 years. I'm not clear either on the difference between the situations set out in Part 5 and Part 7 of Section 20. Can anyone else throw any light on this? How great is the period between repossession and sale in your case? If it's very long you should ask the lender to explain why. If it's not too long, maybe you don't need to worry about which part of the Act your arrears fall under? Good luck,

-- Melody (, April 15, 2002.

I am also unsure re the limitation acts regarding shortfalls however i have been advised that there is a case in the court of appeal, which is to be heard this year which will decide once & for all what the actual ruling will be re limitation. Obviously this will affect alot of us in the same situation. Lets hope it is good news.

-- Sally Moreton (, April 15, 2002.

Do you have any more information about this current case?

-- Melody (, April 17, 2002.

If I was in your situation and you say that your financial situation is going to improve soon. I would probably try and sort it out sooner rather than later. I sent in I&E forms and as long as you don't have any excess funds you should be o.k.

Be wary if you have any finance arrangements as they will probably want this money once your payment is complete.

If you can afford to make them an offer then you have nothing to lose as long as you state that it is not an admission of debt but a one off payment as an end to the situation.

I am not praising the Halifax in any way as they have put me through hell this last year but I will say that at the end they seemed to want the shortfall situation cleared up as much as I did, and they did it quickly without much fuss.

Good luck

-- (, April 19, 2002.

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