Private Debt coming to light 8 years after probate

[ReFresh]

My husband borrowed about £8,000 from his brother in around 2004. His wife sent us a letter in early 2009 saying that with interest we owed them £16,000 - this is half the debt as interest! (£5,000 had previously been put as a charge on our house in my brother-in-law's name).

My husband's brother died in October 2009. We did not hear anything more until an undated letter arrived at the beginning of January 2018. We did not do anything and then another letter arrived a month later (February) saying that we owed her this money.

From my understanding, this should have been sorted out during probate and she should have assigned both the unsecured debt of £11,000 and charge on the house over to herself. This did not happen. She states that the £11,000 is an unsecured debt, but she is still claiming it and she assumes that she can have the £5,000 charge on the house.

1. Is she entitled to the charge on the house (as it was in her husband's name and not hers).
2. If someone dies what happens to their charge on a house?
3. Having not heard anything for nearly 9 years (8 1/2 years since the brother died), is what she is doing legal? We assumed the debt had died with him as we hadn't heard anything.
4. Even if the £11,000 debt was in both names, shouldn't she have assigned it over to herself during probate?
5. Is the 'unsecured debt' statute barred?

What are our rights? What do you think we should do?

Kind regards

ReFresh

[Amethyst]

When your husband borrowed the £8k from his brother was there anything in writing, anything at all agreed as regards to interest and repayments being made? For the £8k debt incurred in 2004 to become £16k in 2009 it would mean an interest rate of approx 36% per annum.
Was your husbands brother married to his wife in 2004 ?
Did you respond to your brothers wife at the time of her letter in 2009 ?
When and how did the £5,000 charge get put against your house?
Has she made any indication of intending to go to court for this ?

[ReFresh]

Hi Amethyst

Thank you for your quick response. There was nothing in writing at the time he borrowed the money. Shortly afterwards he put a charge on the house. When he was dying in 2009 she stopped my husband having contact with his brother and wrote a letter basically blackmailing us that if we didn't agree to this debt he wouldn't be able to see his brother, so we signed a piece of paper that she had typed out.
It was all for nothing as she still wouldn't let us see him. Yes, they were married. The £5,000 charge was done in December 2003 (sorry I got that wrong, so there were two debts. One was in 2003 (we borrowed around £3,000 and they included interest and costs and made the charge on the house £5,000) and the other was in around 2004 (around £3,000.)).
I don't remember having signed anything regarding the charge on the house.
She said she didn't want "to take any formal action, but she will if she must."
Thanks ReFresh

[Amethyst]

Oh goodness, that’s so awful

This paper she blackmailed you into signing - do you have a copy at all ? Was that agreeing,basically, that you owed her £16000?

That was in 2009 and you’ve had no contact about these ‘debts’ at all , nor paid her anything, until now ?

The £5k charge on the house was voluntary and done in 2003 - have you actually checked that it does appear on the land registry ?

[ReFresh]

I've just re-read all her letters. Unfortunately,Â*the emotional blackmail was in telephone conversations and not really in the letters.Â*

In 2005 they said that the original loan was increased to £5,000 to pay for the costs of registration and to include interest. They suggest interest be added at a rate of 6% pa. They also asked us to arrange for the Charge to be varied, which we didn't do. They also wanted to increase the Charge to £10,500 to include interest, but they then say in 2009 that they couldn't increase the Charge without the consent of the mortgage provider.

The next letter was in 2009, where she states that the debt of £16,000 was agreed in 2007/8 - which was nonsense. Then she talks about her husband and tells us to leave him alone. (We found out after his death that her husband kept asking to see his brother and also she said in this letter that he did not know that she was writing it). We basically said we agreed to the debt. But, we felt compromised into doing so - unfortunately, we didn't say this and only said that we thought the figure should be less. There has been absolutely no contact about the debt since April 2009. His name appears on the Land Registry (but not the amount) - we don't know how it got there as we can't remember signing anything. Can a Charge be put on a house without knowledge of the owners of the house?

In her last letter she asks us for proposals to pay £11,000 of unsecured debt. She says she has not asked for interest in the last few years to give us breathing space!!!!! She also says she expects interest to be paid on the £16,000 on a monthly basis at 5%. She also says that she doesn't want to take any formal action but I will if I must.

Thank you
ReFresh

[Amethyst]

Do you have a copy of the letter / document that you signed ? That's likely to be important.

The first loan being secured on the property could be an issue - it sounds like you agreed to repay £5k on the original £3k loan and allowed them to secure that via a charging order. How the charging order was entered though, without a court order or anything from your husband/yourself, I don't know. Diana M knows more about how charging orders/restrictions work so hopefully she'll pop her head in later.

The second loan wasn't secured on the property and no agreement was made as to interest. Plus you haven't discussed it with her since 2009? at all and it would likely be deemed as statute barred. Of course that would depend if there was any agreement to borrow for x years before paying back - but it seems nothing was in writing at all between 2005 & 2009? ( hence that letter being important )

I'd be inclined to let her take it to court tbh. She is trying it on.... 5% monthly interest ?!??! - maybe she thinks she's Wonga.com - no court would allow that - if they did ever find in her favour on the original loan repayment then it is likely to be an absolute maximum of 8% per annum statutory interest.

[Amethyst]

Also, were there any issues with your Husband's brothers will & probate involving his wife ? ( just wondering if somethings gone on which could explain why this has become such an issue for her ) - also relevant to what happened to the charge being in only his name at the time of his death.

[ReFresh]

We only borrowed money from the brother. His will leaves his estate to his wife absolutely. Probate was granted in May 2010. I expect she forgot about this and has now thought to bring it up.

But, from what I can understand for probate to be carried out she would have had to transfer/assign this debt to herself and inform us in the process - as not only was she the sole beneficiary, she was also a joint executor. The fact that she didn't at the time and is now trying to claim a dead persons money is surely illegal?
ReFresh

[Amethyst]

Do you have a copy of the charge entered at the Land Registry ?

[ReFresh]

We've just got an e-copy of the basic Land Registry Title Number which we got in January.

[ReFresh]

I'm sorry, I missed this post.

Yes, I do have a copy of the letter that we signed.

You say that the first loan could be an issue, but how is she allowed to claim it as hers so long after her husband's death? There was no court order, that we know of.

We haven't discussed the debt since 2009. There was no agreement of how to pay it back.

I am pretty sure that she will have difficulty taking it to court, but do we just ignore her letters? I am also pretty sure that she doesn't know how much was borrowed. Can we ask her to itemise what is owed? Does that matter if we stupidly agreed to £16,000 - £10,000 more than was borrowed?

Thank you
ReFresh

[Amethyst]

Would you be able to post or send me a copy of the letter you signed ? ( personal details redacted )

The second debt I don't think there's an issue - staute barred, based on 'simple contract' so that should be okay.

Did you borrow the money to pay a house deposit ? ( just wondering as sometimes lenders make the person putting up the money to sign to say it is a gift )

Peridot is having a look into the secured debt and probate bits for you and should pop on tomorrow with some thoughts She mentioned it might be worthwhile seeing if you can get a copy of the initial charge application made to the LR. It can't just be put on the property without either a voluntary agreement or a court order so it is worth investigating. Also sounds like she has been incontact with land registry again to increase the amount secured, which is completely out of order as she has been told by the LR it'd have to be cleared by the mortgage co. I'm wondering how she is managing to even get that far tbh. I think the document might shed some light.

I wouldn't go back to her at all until you've figured out the exact situation then you can tell her what's what and if she insists on proceeding with legal action you will strongly defend her claims.

[ReFresh]

Thank you for your response. I will sort out the letter in the morning, if that's OK. Our circumstances changed, credit was easy and we stupidly borrowed money to pay off the interest of debts and got into a real mess - credit cards were easy to come by and so we got into one bad situation after another. This Charge money, £3,000 was used to pay mortgage arrears.
I'll be in touch again in the Morning.

Thank you for all your help.
ReFresh

[ReFresh]

This is the letter. The dates are interesting, hence the exclamation mark!



18^th May, 2009

Dear XXXX

Thank you for your letters of 25^th April and 21^st May(!) XXXX and I agreed on 10^th April this year that our debt with you was £16,000 – in fact I make it slightly less than this but we will agree this figure.

With regard to the second part of your first letter, I was very upset and deeply hurt by your inference that I had been gossiping about XXXX. I have done no such thing. When people ask me how he is, I tell them but I also tell them that he is still playing golf and driving. I cannot be held responsible for other people’s interpretation of the situation. He is my brother and I am very concerned about him and obviously want the best for him.

Regards

Signed by my husband

Then both our signatures

[ReFresh]

Apologies for the way that has come out. I don't know why I'm having so many problems both typing and copying things.