Old Debt

[ladyjane]

Hi
Could I please ask for some advice on behalf of my niece.

My niece and her former partner had a joint mortgage with "N-RAM", when they separated her partner carried on living in the property and for a while was paying the mortgage.
However, when he met his new partner he stopped paying the mortgage and moved out of the property. The property was eventually repossessed. This was over 7 years ago.

Obviously the outstanding debt was owed by both my niece and her ex-partner, however, neither of them have made any payments for over 7 years.

Since then my niece has met a new partner with whom she now lives with and they have two children together.

My niece has recently received a letter from "Allied International Credit (UK) Ltd" stating that the debt has been assigned to them and demanding payment of the outstanding balance, which is £31,837.73.

Am I correct in saying that the debt is Statute Barred after 6 years and that the debt cannot be collected by a third party debt collection agency?

Any advice and guidance that you could give me would be greatly appreciated.

Many thanks in advance.

[ostell]

Re: Old Debt

Sorry to sadden you but I believe that the period for mortgages is 12 years. I can't point to the legislation but no doubt someone will be along to confirm (or otherwise!).

Is your niece working? If not they will have a problem collecting. Does she know the address of her ex partner? May be beneficial to point Allied in his direction.

[nemesis45]

Re: Old Debt

I presume that this is a mortgage shortfall debt?

The Council of Mortgage Lenders and its members agreed not to pursue
such debts after 6 years if there had been no contact between the parties
within the relevant 6 year period.

nem

[ostell]

Re: Old Debt

But this looks as though the debt has been bought by Allied International who may not be prepared to abide by the agreement. They want their purchase money back !!!

[des8]

Re: Old Debt

Sorry to sadden you but I believe that the period for mortgages is 12 years. I can't point to the legislation but no doubt someone will be along to confirm (or otherwise!).

Is your niece working? If not they will have a problem collecting. Does she know the address of her ex partner? May be beneficial to point Allied in his direction.

If you owe mortgage capital
Mortgage capital is the money you originally borrowed. For this part of a mortgage shortfall debt, the lender has 12years to use court action to make you pay. This is under section 20 (1) of the Limitation Act.
If you owe interest
Mortgage interest is the interest you were charged to borrow the money. Your lender may also charge interest after your home is sold. For this part of a mortgage shortfall debt, the lender has six years to use court action to make you pay. This is under section 20 (5) of the Limitation Act.

[wales01man]

Re: Old Debt

Is it 12vyears for the debt but the interest after that can only be claimed for 6?

[ladyjane]

Re: Old Debt

But this looks as though the debt has been bought by Allied International who may not be prepared to abide by the agreement. They want their purchase money back !!!

My neice is not working and therefore does not have any means of paying back the shortfall. She does not know where her ex-partner is anymore!!

Is there any particular letter that she should/could send to the AIS who have obviosly purchased the debt ?

[kazz04]

Re: Old Debt

Its 12 years for mortgages. And the debt should be shared between two if it was a joint mortgage. It entirelt depends on what the situation of the person at the moment. If the persons not in a situation to pay, then you can't do much.

[Nibbler]

Re: Old Debt

Plenty of info and some sample letters here:

https://www.nationaldebtline.org/EW/...shortfalls.pdf

[Debt Camel]

Re: Old Debt

AIS should be bound by the CML guidelines even if they are not members. See http://www.cml.org.uk/policy/guidanc...d-possessions/ para 31:

Where the lender uses a third party debt collection agency to recover theshortfall debt, that agency will be required to comply with this Statement and willremain under the control of the lender. If the mortgage shortfall debt has beenassigned to another company, the principles of this Statement will continue to apply.