Since our repossession in 1992 and receiving a shortfall claim of £42,296.98 about five years later, my wife and I have been receiving correspondence from a debt collection agency called Direct Legal & Collections. Due to the invaluable advice given on this web site, we have sarn'ed DLC and also NHL. The usual stuff, house undersold etc.,but no copy of the mortgage deeds or the money judgment order. We have requested this time after time, but they ignored this request,until eventually they admitted that they do not have a copy. NHL suggested that we obtain a copy from the court. When we made enquiries, the court told us that they do not have any record of a Money Judgment Order or any other information about the case. So we have continually requested a copy from NHL and DLC. the only response has been from DLC sending an I & E form, and stating their disappointment that we have not replied to their previous letters! - This is untrue! After refusing yet again to fill in their I & E form and again requesting the MJO, we have received the following letter: YOU SHOULD BE AWARE THAT THE OUTSTANDING DEBT WILL NEVER BE WRITTEN OFF AND WE ARE DISAPPOINTED THAT YOU HAVE NOT RESPONDED TO PREVIOUS CORRESPONDENCE OR ACCEPTED THE OPTIONS TO RESOLVE THIS MATTER. YOUR FILE IS NOW BEING TRANSFERRED TO OUR DEBT SURVEILLANCE PROGRAMME WHERE IT WILL BE SUBJECTED TO REVIEW FOR UP TO SEVEN YEARS. WE WILL INSTRUCT FIELD AGENTS TO MAKE WHATEVER ENQUIRES ARE DEEMED NECESSARY TO ESTABLISH YOUR FINANCIAL CIRCUMSTANCES AND YOUR WHEREABOUTS. Considering they have been writing to us for the last five years, I think they already know where we live! Any suggestions on how to respond to these threats would be most welcome! We intend to see through anything they try to throw at us, Scare tactics aren't going to work!

-- david carpenter (david.carpenter4@btinternet.com), June 07, 2002

Answers

I'd say that letter is more an admission of defeat than a threat.

If it was worth taking you to court, they would. They aren't so they are dropping back to hoping that you eventually show some signs of assets, income worth pursuing you for.

So simply don't allow any evidence of such assets to be visible.

Once they have no legal right to do anything about it if you do become worth suing (either six years or 12 years - as yet undecided), then the *alleged* debt *will* be written off. Why? Because there is no point in paying the postage on threatening letters for an alleged debt that they can no longer enforce.

They may sell the debt to debt collectors but they probably won't waste too much time on it either for the same reasons.

Congratulations! I'd say you've won. Until the next seven years has passed I would plan my finances around not owning assets on paper and not owning huge PAYE income. Be particularly careful of benefits/DSS claims - I'm pretty sure this is the chief way that personal earnings and asset ownership information leaks out.

Debt applications, mobile phone contract applications and mail order catalogue applications appear to be another way that income and asset ownership information leaks out.

Well done!

Lee

-- Lee (repossession@home-repo.org), June 07, 2002.

I have to disagree with some of what Lee has posted. The 1980 Limitations Act gives the lender 12 years from the date of discovery of the debt (ie. the point at which the debt became known to the creditor- your lender). Although the lender would argue that this is the sale date of the property, a court would most likely accept a much earlier date such as the repossession.

Since you cite 1992 as the year in which this happened then sometime in 2004 you will no longer have to fear pursuit by the lender, DLC or anybody else. It will also become a criminal act to pursue you for the alleged shortfall debt beyond this date.

The DLC letter is clear evidence that they have nowhere else to go. Stay polite, keep requesting the information you need to assess the validity or otherwise of their claim and bat it out until close of play is my advice.

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

A bit late but better than never

Under the LA 80 time runs from the date of the 'accrual of the cause of action'. This is the date from which the lender could first take court action. This is usually the date of the first missed payment. It doesn't matter that the creditor didn't know that it could sue unless this was dishonestly concealed by the debtor (e.g. hacking into the Abbey's computer (dream on)).

Time can start to run afresh whenever a debt is acknowledged in writing or a part payment is made during an existing limitation period. An ackn or pt paymt made after the expiry of a limitation period has no effect. The debt is already statute barred.

An acknowledgmet only binds the person who makes it but a part payment binds all other joint debtors.

The Court of Appeal will decide whether a shortfall debt is a simple contract with 6 year limitation period or a specialty with a 12 year period.. I think it is inevitable that they decide 12 years (Barclays Bank v Beck and Nat West bank v Kinch) but who knows.

Remember some mortgages have 'shortfall covenants' in them under which the borrower specifically covenants to repay any shortfall debt. If there is such a covenant, time will start to run from the date of the sale of the ppty (whether it be 6 or 12 years). It's quite OK for a lender to have 2 seperate causes of action in relation to one debt.

Hopefully the CA will sort-out the shortfall issues relation to MIG claims - can you argue 6 years on the basis that the contract of insurance (the MIG) is a simple contract, or does the MIG insurer take over whatever rights the lender had? We'll have to wait and see.

Fingers crossed

Guy

-- Guy Skipwith (guy@skipwith107.freeserve.co.uk), June 17, 2002.

Er...Guy....

"Time can start to run afresh whenever a debt is acknowledged in writing or a part payment is made during an existing limitation period."

This is a classic scare tactic used by Lenders and their staff, particularly those who post on here. Twelve years (specialty debt limitation) is set in stone from exactly when you stated *unless* criminal proceedings are invoked - the limitation period doesn't start again once you part pay or acknowledge the debt. For many of us, contractual default (yes you do have to look at contract Law) occurred way before the repossession. Lenders still insist that it occurs from the sale of the property, which is an increasingly untenable position to maintain. Either way, they have twelve years - period - until the C of A says otherwise. MIG payout portions are most likely debt simple, as it is impossible to inherit specialty debt status under Rights of Subrogation unless the original mortgage contract is redrawn and signed under seal by *all* parties - hardly practical under the circumstances.

-- Too scared to say (iwasduped@yahoo.com), June 17, 2002.

Hi there

I don’t like getting into arguments about these things, but "I was duped" is just plain wrong. You only need to look at the Limitation Act 1980 sections 29, 30 and 31.

Section 29 is headed "Fresh accrual of action on acknowledgment or part payment".

Specifically, section 29(5) states "... where any right of action has accrued to recover -

(a) any debt or other liquidated pecuniary claim; or (b) any claim to the personal estate of a deceased person or to any share or interest in any such estate;

and the person liable or accountable for the claim acknowledges the claim or makes any part payment in respect of it the right shall be treated as having accrued on and not before the date of the acknowledgment or payment."

Section 29 (7) states "...a current limitation period may be repeatedly extended under this section by further acknowledgments or part payments, but a right of action, once barred under the Act, shall not be revived by any subsequent acknowledgment or part payment".

I hope that is plain enough.

To advise people that a limitation period cannot be restarted by acknowledgment or part payment is totally misleading and grossly negligent. It just is not true. People who believed "I was duped's" last posting could have got people into a lot more difficulty if they had believed what was said.

Please do not post unless you are sure that what you are saying is correct.

"I was duped's" last posting needs to be retracted before any (more) damage results.

Guy

Guy

-- (guy@skipwith107.freeserve.co.uk), June 25, 2002.

Back in your pram Guy. You may wish to check with a barrister as to the requirements of any extension of a specialty debt, as I have. It cannot be renewed forever as you suggest. Other legislation your employer obviously forgot to give you to post on here comes into play.

-- Too scared to say (iwasduped@yahoo.com), June 25, 2002.

Oh..and in response to your very arrogant email - I have never and will never encourage anyone to acknowledge these alleged shortfalls. I got caught that way, by getting misleading advice from my Lender and a solicitor who took my money but, it later transpired knew nothing about the law surrounding specialty debts (an area which is by no means clear, according to Lender's, barristers etc). When you have had your life put on hold for over a decade by parasites who would destroy families to cover their own fraudulent tracks, you do take the time to check.

-- Too scared to say (iwasduped@yahoo.com), June 25, 2002.

I would like to know your authority for saying that a specialty debt cannot be extended indefinitely. As far as I know there are no 'longstops' in this area of limitation law. The sections of the LA 80 are quite specific and it would need the CA or House of Lords to interpret it otherwise. I have read very extensively on limitation issues (my main reference has been 'Limitation of Actions', Oughton, Lowery and Merkin, LLP Reference Publishing, 1998 + Law Comm Rpt). If you know differently, please share this info.

There IS some doubt about limitation periods regarding shortfall debts - the question raised by Tupper - what is their status where there is no longer a mortgage deed - are they then simple contracts or, even though there is no deed any more, are they specialties?

Barclays Bank v Beck and Nat West Bank v Kitch would indicate that they will be treated as specialties, although these cases did not actually deal with shortfalls. See also Global v Jones and Securum Finance v Ashton ( if you have a copy of CA or House of Lords on the latter I would be grateful for a copy.

There may also be issues relating to MIGs and subrogation. Can it be argued that the contract insurance is a simple contract or does subrogation give the insurer all the lender's rights?(see section 5 Mercantile Law Amendment Act 1856).

My empolyer, by the way, is the National Association of Citizens Advice Bureau (and I am a solicitor).

I still think your original posting was/is misleading.

Guy

-- Guy Skipwith (guy@skipwith107.freeserve.co.uk), June 26, 2002.

I would certainly like to see in black and white that a specialty debt cannot be extended indefinitely. I suspect that it can't, inspite of what it says in the Limitation Act 1980. Simply because if cases such as these could carry on forever, then the legal system would collapse under the weight of unresolved cases, which doesn't seem very sensible to me. I would also like to know what exactly constitutes an acknowledgment, would for example a simple list of income and expenditure with a signature, but with no other wording be considered as such ? If so, then why did the CAB advise me to send one? In fact the one I was given by the CAB had even more info on it.

-- M Amos (idgroms@hotmail.com), June 26, 2002.

Ref our difference of opinion: s20 LA (actions to recover money secured by a mortgage etc). "no action shall be brought after the expiration of 12 yrs from the date on which the RIGHT TO RECEIVE THE MONEY accrued".

The right to receive money is the date of contractual default - a mortgage is a contact under seal (in most cases) but the primary law on contract applies in concert with the Limitation Act and specialty debt status as defined.

The point being that with the six year voluntary code, sec 20 is easily invoked and it sits with the staying of all "new" actions not brought before the Courts before the 2000 deadline. i.e. if they have no MJO before then,on new cases where there has been no contact, they are screwed. A barrister friend of mine (who checks my research as a favour, this is not done officially, I can't afford him) told me that this deadline was put in place because of the amount of "frivolous" claims by Lenders....the situation in his opinion was also exacerbated by the CAB and solicitors putting up little or no defence in repo cases and the judges unwillingness to question the big boys. He admits that the assumption is that the Lenders are right in most cases and that since there are now serious doubts, highlighted by bad publicity, the EDM and this great site, to avoid lengthy and costly cases (which the taxpayer will end up funding) they tried to "plug the hole" with the 2000 limit and the 6 year voluntary code. Knowing the Building Societies did not want to risk an unfavourable ruling on the 6/12 year issue, (ref Holmans case) it was a half way house before cases came to Cof A. A damage limitation exercise if you like. Doesn't help people like me of course, who were badly advised by the local CAB and a dodgy solicitor they told me to see after repossession, when I got hit with a shortfall letter they promised me I would never get. Mine was a voluntary repo, advised by the Lender.The CAB agreed it was the best course of action and told me do what they said. This poor advice has messed my life up totally for over a decade. I had to leave my job because they were hassling me there and eventually I just took my kids and left the country. There are plenty of previous threads (about this time last year I think) where we went through the specialty limitation thing from top to bottom - I can find them for you when I have time so that you can see where and how we got to where we did. Granted other people who read this thread may also have not bothered to go back and check or read other parts of the site. For that I regret not being as specific as I should have been. If you can suggest the wording to define exactly under what circumstances an extension can be granted (i.e after a judgement has been made, because "action" to recover is not simply the first shortfall letter is it?)I will happily post up a clarification. You have to concede that extending the limitation indefinitely would make the legal system dealing with debt actions grind to a halt. There would be no need for any Limitation Act at all then would there? Everything has a statute of limitations in the end, specialty debts are no different. I cannot give you what you want in terms of a written decision/authority because my case is probably going to go through the Courts if they find me again. If they do push it that far at this stage in the game, still with no MJO in place, I will go public and let it be used as a test case by anyone who wants it. I have nothing more to lose. No doubt you will get the written judgement on this when they finally bankrupt me. The irony is that I am sure the MIG portion is now statute barred and it represents over half of the alleged shortfall. The balance is interest on interest which would not be there had they not vastly undersold my place. The arrears were less than 700 quid by the time I handed the keys back, but they wanted it all in one go or nothing. So yes, it's a big point of principle to me and I will fight it to the end. Giving people misleading advice would never be my intention; it's simply easy to forget that not everyone has been following this site and the shortfall issue for as long as I have when I reply to worrying posts.

-- Too scared to say (iwasduped@yahoo.com), June 26, 2002.

I can add no more to the last post from Too Scared to Say apart from WELL SAID.

-- Matt (mattyc@ntlworld.com), June 27, 2002.

Absolutely! I too was advised by a solicitor, and an excellent one at that, that there is a time limit when the lenders have to stop chasing you for the debt. I have personally e-mailed 'I Was Duped' to thank them for the excellent advise they give on this site. I don't think there is any need to get into 'badmouthing' people on this site as we are all here to help each other (apart from the odd one or two I might add) and it is a joy and a comfort to know one is not alone in this situation and we can and will reach a conclusion, hopefully a satisfactory one at that.

-- Chris (chris@anon.co.uk), June 27, 2002.