12 Year Rule again - start or finish???

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With reference to mortgage repo shortfall - does the 12 year ruling (if it is relevent) allow the lenders 12 years from first contacting you to collect the shortfall or to initiate proceeding against you. If the latter is the case then is there any time limit for them to achieve a settlement???


-- kevin webb (kevinwebbuk@yahoo.co.uk), March 07, 2004



the 12 year ruling applies from the date of the first missed payment as it is at this point when you are in breech of your mortgage conditions. Some BS's and banks will try to make out that it is at the point when they contact you for the first time regarding your account which could be years later.



-- John (sharky_john@hotmail.com), March 10, 2004.

Hi Kevin,

Take a look at this link it explains most of what you need to know. www.cml.org.uk/servlet/dycon/zt-cml/cml/live/en/cml/pub_info_dept

-- Chris (chris@anon.co.uk), March 10, 2004.

Well - I don't think it's quite that simple. I haven't checked out Chris' link but it's John's answer that concerns me a bit. The lender has 12 years to recoup what they think they are owed, and the 12 year clock starts from the date upon which a mortgage is defaulted on. In my experience (and certainly in my very personal experience) that default usually occurs when the third consecutive payment is missed. I am aware, though, that lenders apply different criteria and the ones of doubtful parentage that you are dealing with will have defined it in the terms and conditions attached to your mortgage agreement. Take a close look at them Kevin and bear in mind comments across this site regarding the ways in which part payments or admission of a debt can start that 12 year clock ticking again.

Good luck.

-- Brian Mitchell (pridegreen@ntlworld.com), March 10, 2004.

I may have been a little confused in the question - what I was asking is: if you have not admitted to the debt - but the BS has written to you informing you of the debt within the 12 years then it seems that they have initiated recovery action and so can pursue the matter as long as they wish. Is this correct???

-- kevin webb (kevinwebbuk@yahoo.co.uk), March 10, 2004.

Hi Kevin,

I think, but I am not an expert there are others far more knowledgable than I, that they have 12 years to initiate court proceedings. However, my fiance was repo'd in 1991, his ex-wife did make a part payment in 1997, but, on the advice of a very good legal friend of mine we have gone down the road of him not admitting to the debt at all.

Last letter he wrote to BS Solicitors stated that as 12 year time limit was about up, as the BS were members of CML and as they consistently wrote the same letters he did not want to hear from them again. That was back in November - all quiet at the moment, but we're not holding our breath.

We have kept everything separate regarding the house, this is in my name and I pay everything connected to the house from my account and my salary - my fiance has nothing, no car, no property etc. etc. so the ba****** can't touch what we are working for.

-- Chris (chris@anon.co.uk), March 11, 2004.

The CML guidelines say they will make first contact within 6 years (NOT 12!)and that if they don't, they will not pursue the debt. Note that this is only a guideline, and not legally binding on them, but they're unlikely to break it openly. So if they have never contacted you until after 6 years, your first point should probably be that even if you were to admit liability for the alleged debt, they've burnt their boats. The problem with this is they may come up with a copy of a letter supposedly sent to you years earlier, but which you never received because they incompetently sent it to the wrong address, or the postman ate it, or something. Even if you never received it, they will claim it counts as a first contact. The 12 year rule is different - it is from the Limitations Act, so is a proper law, not a guideline. This says that the lender can chase a mortgage debt for 12 years from the date on which you first defaulted on a mortgage payment. Often this is months or years earlier than repossession. So they have 12 years from this date to collect the shortfall. Any portion of the debt that arises from the interest part of the mortgage can only be chased for 6 years from the date of first default. hth

-- Melody (melody_clarke@yahoo.co.uk), March 11, 2004.

Yep, I stand corrected. Chris and Melody are right - I used the word "recoup" instead of saying "initiate proceedings" so I'm sorry if I gave a wrong impression.

It's the wine, you know. Sorry everyone.


-- Brian Mitchell (pridegreen@ntlworld.com), March 11, 2004.

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