Limitation Act

[Wolf]

Hi,

I had a secured loan which finished in 2003. There were some arrears but these were paid off and I paid extra to cover interest and charges. I had a settlement figure in 2003, but this was never paid off.

I didn’t hear anything again from them until this year when they wanted me to contact them saying I still had outstanding monies owing. They want the original amount plus interest from 7 years ago.

From my understanding of the Limitations Act 1980, they have 12 years to recover capital debts and only 6 years for interest. The capital on the loan has been repaid and the amounts outstanding are in the following categories:

Default interest
Costs
Deeds release fee
Discharge fee
Legal & Documentation fees

I would assume that I would have to pay the deeds release fee, but not the interest. Are the monies owing in the above categories statue barred?

Are these debts now classified as unsecured?

Any comments appreciated.

[Amethyst]

Re: Limitation Act

Hiya, just to confirm, was the loan 'finished' because it had been paid off in full, or because of defaulting after paying up the arrears - apologies it just isn't clear to me from what you said ...
[quote]
I had a secured loan which finished in 2003. There were some arrears but these were paid off and I paid extra to cover interest and charges. I had a settlement figure in 2003, but this was never paid off. /quote]

Thanks

Ame
xx

[Wolf]

Re: Limitation Act

Hi Ame,

The loan was 'finished' when the term of the loan ended, as per the agreement. At that point the capital had been repaid. The arrears were paid well before the term of the loan ended.

Thanks for reading.

[Amethyst]

Re: Limitation Act

Okay, so what are they chasing ? Just the settlement figure - which consists of;

Default interest
Costs
Deeds release fee
Discharge fee
Legal & Documentation fees


The interest I would agree is stat barred.

The rest would possibly be directly related to the deeds release and discharge of the debt, were the deeds released at the time, then they invoiced you for it in the settlement figure (in which case I'd say yes stat barred) or have they not been released until payment is made ? (in which case no).

Does that make sense/help whatsoever ? Basically are these costs relating to a service carried out and invoiced over 6 years ago, or a service which has yet to be carried out.

[Wolf]

Re: Limitation Act

Hi Ame, yes it does make sense and help!

They are chasing the settlement figure which consists of the items in the categories below, and they still have the deeds, these will be returned when the account is settled.

For the categories:
Default interest - interest on the arrears, way over 6 years ago
Costs - associated with the arrears, again, way over 6 years ago (letters etc)
Deeds release fee - not yet released
Discharge fee - not yet discharged
Legal & Documentation fees - these were for fees at the start of the loan, but in the credit agreement it states "The legal charges become due and payable upon completion of the loan." In the latest settlement letter it says "Within the credit agreement you agreed to a Legal and Documentation Fee. This fee becomes due when the loan is funded, but payment is deferred until either early settlement or at the end of the loan's term. This is a non-interesting bearing fee and covers all costs incurred during the underwriting process." They even added interest to this and the deeds release fee and discharge fee. 7 years worth of interest adds up!! But if that is statute barred, I don't need to worry about that.

I was just abit unsure, because the limitation act talks about money secured on the property, and i'm not sure which bits are which, with regards to them having 6 or 12 years to chase the debt.

Thanks for your help on this, much appreciated.

[Wolf]

Re: Limitation Act

An update on my situation: I received the final response from the loan company regarding my complaint. Their reply was:

“With regards to your comment that the debt is statute barred, we would firstly like to clarify that it is not statute barred as we last had contact in 2003. Secondly, the relevant legislation provision for debts similar to yours is section 20 of the Limitation Act which refers to a mortgage shortfall, which does not apply to you in this instance. Once we sent the settlement figure, the onus was on you to ensure you cleared the outstanding balance.”

Is it me, or is that just total rubbish? Section 20 isn’t about mortgage shortfalls specifically. And they say that as we last had contact in 2003 it is not statute barred. That’s 7 years ago!! I am confused.