Debt collection agency threatening to refer case to solicitors

[chris2323]

Hi everyone,

I hope someone can help

I am posting for my sister with her permission. She defaulted on her credit card around five years ago (2015) just over 10k.

Before the default she had a good job and was doing fine. She went through a difficult time - lost her job in Jan 2012 - never quite got it together after that - seriously / clinically depressed and couldn't get another job (tried and attended interviews).
In this time she never claimed benefits or went to the Dr for an official diagnosis - she has lived off me, my parents and her boyfriends, in about eight different addresses to my parent's address (where the credit card was linked to.)

She managed to get a job in Jan and I helped her move into her own small place (paid her deposit).

Debt collection agencies have sent letters for years - and we have tried to get them to her. The recent ones from cbot are threatening to refer her case to their solicitors. She tells me she has been receiving calls from them since she started work. (She has bought some stuff online like argos with her debit card, still linked to the parent's address and she will come and collect every few months.)

My parents and I are really worried now because my parents bought their house (2006) with her help (she was the only one who could get a long mortgage) and she is on the deeds / mortgage and the mortgage has been paid from her account ever since (with my father depositing the money every month - which we can prove). They never got round to removing her or changing it.

My parents are worried sick they will lose the house.
Can someone help?

[Celestine]

Hi Chris - I just wanted to post briefly to offer reassurance that your parents will not lose their home. Although technically the amount involved is over the bankruptcy threshold, it is extremely unusual these days for debt purchase companies like Cabot to use bankruptcy.
If the account is referred to Cabot's solicitors, there is a strong chance they could issue a court claim, especially as the 6 year time limit is coming up fast.
If that happens and your sister does not defend it, then they could enforce a judgment via a charging order secured on the mortgaged property. This is a legal charge which is registered and means that upon sale, the creditor would be paid, but they cannot force a sale...they have to wait, potentially decades. Usually a payment schedule is set up alongside such a charge.
It really sounds like now is the time to get to the bottom of this debt.

[pt2537]

Hi Chris - I just wanted to post briefly to offer reassurance that your parents will not lose their home. Although technically the amount involved is over the bankruptcy threshold, it is extremely unusual these days for debt purchase companies like Cabot to use bankruptcy.
If the account is referred to Cabot's solicitors, there is a strong chance they could issue a court claim, especially as the 6 year time limit is coming up fast.
If that happens and your sister does not defend it, then they could enforce a judgment via a charging order secured on the mortgaged property. This is a legal charge which is registered and means that upon sale, the creditor would be paid, but they cannot force a sale...they have to wait, potentially decades. Usually a payment schedule is set up alongside such a charge.
It really sounds like now is the time to get to the bottom of this debt.

Technically, if they get a charging order then it is within their powers to seek an order for sale. This doc provides some helpful info https://www.landmarkchambers.co.uk/w...r-Sale-BEF.pdf

I agree with Cel that bankruptcy is unlikely, and County Court proceedings are more likely. Cabot have become very risk averse lately, from what im seeing they arent litigating half as much as they used to.

What you need to do is get your sister to take charge of this issue, she needs to start looking at whether the creditors have complied with their statutory obligations and if so whether she can apply for a time order under s129 CCA. Time orders are often overlooked but they are extremely good ways of protecting consumers from enforcement action. If the Court allows a time order then the creditor cant seek a charge or an order for sale etc.

I would suggest it would be helpful to know a little more about the debts, who they were with etc, as this will help others steer you in the right direction

[chris2323]

Thank you both so much for your replies (to Celestine and PT2537).

In reply to - "I would suggest it would be helpful to know a little more about the debts, who they were with etc, as this will help others steer you in the right direction" -- I believe the debts were a credit card with a high street bank for everyday purchases like lunch and the weekly shop etc

[Celestine]

Given the full circumstances of the account, it would be wise to at least get your sister to agree to allow your parents to 'tackle' this debt by giving them a signed letter of authority to speak/negotiate with Cabot, especially as any enforcement action would impact them initially. Your parents could then make document requests and seek a statement of account to ensure they fully understand the status of the account and can head off any legal action.*
As stated before, a charging order would be the most likely enforcement route after a court case (which takes months if you handle it correctly) and I personally/professionally have never seen a successful order for sale BUT with the amount involved, ignoring this much longer is not an option. Reassure your parents that so long as clear steps are taken, the issue can be managed without stress and risk.

[chris2323]

Thank you for your message on Monday Celestine.
I think we've got her to face this now and she's agreed to work with us.
Seems the logical next step is to ask for a CCA request. Question is should she send it from her new address or the address they are sending the letters to? Many thanks in advance.

[Celestine]

I would stick with the address currently known to Cabot, however don't be surprised if she starts receiving mail at new address. Cabots credit searches and contact tracing will yield it if she has a mortgage or other credit based there.*
The first step is the letters of authority or is she agreeing to regularly participate in the process by signing letters herself? Please take this opportunity to make Cabot aware of any health issues and vulnerabilities. They do have a very good vulnerable customers team who have demonstrated real compassion when I have previously referred vulnerable users to contact them. Good luck and I hope you and your family can get this sorted out finally.*