Can I be chased for debt after repossession?greenspun.com : LUSENET : Repossession : One Thread
Some years ago, my father bought a property in my name which he intednded to rent out. Ultimately, this did not work out and the property was repossessed. The property was in a prime location and I believe it was sold on, although there could have been a shortfall. This was at least 6 years ago. I received a letter today from solicitors acting on behalf of the building society(Countrywide) that there is a shortfall of £25,000. They want me to phone them on the Tuesday after bank holiday to discuss the matter with them. Over the years I have checked my credit file and there was no mention of the repossession, so I (ignorantly) assumed it had been written off. I do not believe there has been any corespondance in the intervening years that my father opened on my behalf, but I can not ask him, as he now has Alzheimers. My current situation is that I am heavily in debt with no assets. What shall I do about the letter? Reading your website has made me think that I should not speak to the solicitors over the phone, but write a 'without prejudice' letter asking for a SARN under 'discovery'. If I do speak to anyone, I should not acknowledge the debt, deny liability and dispute claim. OR, if I do not contact the solicitors at all, they may drop this as it is probably approaching 6 years since I had contact with the building society. How will this affect my credit rating and my chances of applying for a new mortagage? Thanks for your help,
-- Andrew Hall (firstname.lastname@example.org), August 23, 2003
For goodness sake don't phone them, they will manipulate you with their tactics. Use this link and study the site well before you act: http://www.home-repo.org/
-- Martin Davies (email@example.com), August 24, 2003.
DO NOT CONTACT THEM IN ANY WAY AT ALL
Do not worry about any letters they send which say you should reply within 7 day etc. speak to cab or other organisations that help, numbers are on this site. under no circumstances you fill out ther I&E form. read through this site which is very helpful. I was fooled by there letters stating reply within 7 days, also was unaware of this site. good luck and do not worry they cant take what you dont have.
-- helen smith (hel firstname.lastname@example.org), August 24, 2003.
I think you have got a little confused on a few points. Firstly, you say "if I do not contact the solicitors at all, they may drop this as it is probably approaching 6 years since I had contact with the building society", the CML 6 year voluntary code runs from the date of SALE of the repo'd property,, which can often be a substantial period after repossession. It also depends on whether the lender is a member of the CML, this you would need to check. The CML say:
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.
See the CML webpage: http://www.cml.org.uk/servlet/dycon/zt- cml/cml/live/en/cml/pub_info_dept
The two following companies are CML "Associate Members"
Countrywide Assured Group plc
Countrywide Legal Indemnities Ltd
Furthermore, a lender has 12 years to chase you under "Bristol & West v Bartlett, usually from the 2nd or 3rd missed mortgage payments, but you need to check the mortgage terms and conditions to be sure. See also my recent posting "The 12 Year Limit and Endowment Mortgages". If a Money Judgement Order was obtained by the lender from the court, tnen, in theory, a lender can chase you indefinitely.
If I were you, I would read as many postings as possible on the repo Q&A site and the Home Repo Do's and Don'ts. Put the lender to strict proof of the alleged debt. SARN them, I have a SARN letter if you like. "Discovery" can be applied for if a case goes to court and is a mutual exchange of evidence and all relevant information held by each party relating to the case.
As you say you are heavily in debt and have no assets you should consider insolvency as an option, this would leave you debt free and give you a fresh start. Under the new Enterprise Bill coming in next year discharge after bankruptcy will much quicker - 12 months or less from date of implementation. There are already transitional arrangements in place. It currently costs £390. It might be worth offering this amount first to the lender as a full & final settlement after they have been put to strict proof, but this, of course, depends on your overall financial situation. I would talk the options through with a professional adviser (which I am not), for example, the NAMV, the Mary Ward Legal Centre or a local CAB (but find someone experienced in shortfalls). If you do go for settlement make sure any third party is included e.g. insurance company. Be very careful not to acknowledge the alleged shortfall (see previous postings), any offers should be made "ex gratia" with "Without prejudice" written on the letters. If the mortgage was a joint one, be careful that the partner/s haven't acknowledged the debt by means of a part payment.
All this of course will have an adverse affect on your credit rating and will affect your ability to obtain a new mortgage in the future.
Hope this is useful. Good Luck.
-- M Amos (email@example.com), August 26, 2003.