Cabot Financial Charging Order on Statue Barred Debt?

[j45p4177]

I am trying to help my Dad in a bit of a financial mess that we have gotten into and would very much appreciate advice.


He took out an unsecured loan with the Halifax in 2004 with ppi whilst he was unemployed (don't know how he managed this) for the value of 15k. He subsequently defaulted on this and a ccj was issued against his file in 2006. Cabot financial bought the debt and issued charging order in 2009 against a property for 21K that my dad owned. My Dad who is unable to speak english and was generally in poor health did not act on the correspondence and did not attend any of the court hearing leading upto this.


My questions are:

1. Can an unsecured loan be secured later against an asset?
2. Should this not be statue barred?
3. Can they really recover the debt or do i have a chance of putting the ccj aside on the info above?
4. As a way of raising funds I am also thinking of pursuing a ppi claim - the fact that the loan has been sold on and my dad was unemployed, despite defaulting could i recover ppi even though the loan / ppi premiums were not paid off ?
5. If all else fails what is a reasonable offer to make to Cabot?

Thank you for your help.

[Amethyst]

Re: Cabot Financial Charging Order on Statue Barred Debt?

Hi, Sorry to hear of your Dad's problems with this debt.

1) Yes. They obtained a judgment, presumably the judgment wasn't paid so they have secured it on your Dad's house.
2) No - the debt wasn't statute barred at the time of the CCJ, and they secured it on the house 3 years later. All fine time wise. CCJ's don't go stat barred.
3) They can recover the debt - when your Dad's house is sold they will get their cut after the mortgage co - - is there recent communication from the lender which has brought this to the forefront now ?
4) The PPI refund would go to the creditor ( so Cabot ) to pay off part of the debt.
5) It depends what you want to acheive. If it's to lose the debt and have the CCJ removed ( the CCJ should actually have fallen off his credit file now so shouldn't be affecting his credit rating ) You could look at a full and final settlement to have the CO removed ?


On the issue of the original loan being mis-sold - that would be worth looking into and potentially a complaint making. Of course you Dad may have fibbed about his employment status and income at the time he got the loan, but if he was unemployed and just on benefits he shouldn't have been lent it - and also he sounds like he may fall into the vulnerable category due to his language - not sure about health though - was he unwell back in 2006 ?

[j45p4177]

Re: Cabot Financial Charging Order on Statue Barred Debt?

Hi Amethyst,

first of all thank you very much for responding and so promptly too!

Cabot have recently tried calling him to recover the debt and have asked us to make an offer - we are unsure what to offer as my Dad can no way pay off the full amount and is unsure of what offer to make - I guess I was just looking at precedents and wondering why Cabot are keen to recover the debt when they have a sure thing with the charging order. I have looked into a worst case scenario of them going for an order of sale but I have heard this is unlikely.

Thank for clearing up point 4 on the ppi beneficiary - I thought I read somewhere (see quoted text below) that the ppi would be refunded to the applicant and not the debt recovery company - I guess I need to put less rigor around this now! I thought maybe I could use it towards a final settlement but I guess it will just be knocked off against the current balance and then I would have to agree a final settlement with this transaction considered - still better than where we are now I guess

On the point of mis-selling. I have actually send a SAR request to Halifax and to Cabot but there is no record were they have asked (or sent me copies of) his employment status. I don't think we can provide any medical evidence about his health being poor in 2004 but he certainly would have needed a translator to go for the loan. When I ask him how he did it, he told me that a branch manager that he knew translated and vouched for him on his employment status during the application! - which does sound a bit fishy to me! Any idea on what i should do next?


"It all depends on the legal status of the debt.

If the DCA is acting as an agent for the lender then the lender is quite entitled to pay the refund directly to the DCA.

However, many debts are bought by DCA's under a legal deed of assignment and once that happens the DCA owns the debt and the original lender has no legal rights on the debt.

If a deed of assignment was issued then the lender can not refuse to refund the customer directly as the debt is now a matter between the customer and a third party. Its no different to them not being able to pay it to your energy supplier because you owe money on your gas bill. Once a deed of assignment is issued it is no longer anything at all to do with them.

So the basic advice is to ascertain whether the debt was transferred under deed of assignment, if it was then you can demand the money be repaid directly to you."

Taken from: http://forums.moneysavingexpert.com/....php?t=3578899