Property repo'd and sold - So Shortfall Debt becomes a reality

[nuke em]

Does anyone have experience of shortfall debt, how to deal with it, does a lender chase or is it sold/given to a DCA. How is this delt with under the CCA. can you claim that they sold it to cheap for example?

[gizmo111]

This doesn't come under the CCA.
Usually a lender will chase it for a while then pass it on to a DCA, they have 12 years before it becomes statute barred.

[rory32]

They have 12 years on the capital but only 6 years on any interest that has been added to the debt. When was the mortgage taken out? When was the property sold?

[nuke em]

Mortgage was Taken out early 2004, sold last month

[rory32]

The following may be useful National Debtline England & Wales | Debt Advice | Factsheet 11 Mortgage Shortfalls

[nuke em]

Yes Rory thanks for that, its something i have already seen, just also asking if anyone's real time situations and experiences...

[gizmo111]

I paid a reduced settlement after 11 years - shortfall was £7K and I paid 2.2K

[PriorityOne]

I paid a reduced settlement after 5 years - shortfall was £26k on a joint liability debt of £52k. I paid £500 (F&F) around 8 years ago now..... and yes, you have read that right !

A lot depends on your personal circumstances and whether they think they can get any more out of you.... so box clever where you can. Years ago, I can remember reading about lenders being aware that they were unlikely to recover the full amount of a shortfall debt.... and would be prepared to negotiate, rather than chase token payments for years on end. I also read that they were unlikely to negotiate in writing in the first instance..... Both of these were true in my own situation.... but the F&F was put in writing (which I still have) and included a promise to amend the records at Experian.... which they did.

How much are you being chased for ?

[debtsurvivor]

Hi

I can only tell you what happened to my OH he was in a similar situation with the Halifax who were asking for a 42K shortfall when they sold the property in possession, we were shocked by the low price they sold at when we requested information. We decided to seek and pay for legal advice this was around 1998 the property had been sold in 1991. Together with the solicitor we gathered evidence that the property might have been sold at too low a price we ask for and was provided with the copy valuations reports that the lender obtained at the time of the sale. We then gathered historic evidence of property prices at the time, we even resorted to speaking with his old neighbours and wrote to the new residents in the property who obliged us with information regarding the condition when they purchased, and we were able to point to some inconsistencies in the reports produced.

OH attended the court personally together with myself the solicitor and a barister who spoke for him. The Judge was happy that OH seemed to have a counter claim and told the Halifax that they need to rethink their possiton and find a way to settle with him. After a further 3 months during which time a few letters were exchanged and it was agreed that in fact OH might have owed Halifax £10K as OH had no means of paying any lump sum and could only contribute a token payment from income (an exageration) what we decided to do was that I offered to pay £3K in full and final settlement I gave them 28 days to accept of my offer would be withdrawn leaving them to pursue OH through the court.

Halifax accepted we also paid £1200 in legal costs, we thought this was quite good value to make the whole thing go away in five months. Our local CAB were totally ineffective on this occaision, but they have been great on many other matters. I have to say that the expertise of the legal people gave us the mental toughness needed to see us through. However at that time we knew nothing about CAG and with the benefit of hindsight I think we may have tried the route Priority One took at least in the first instance.

Good luck with whatever action you decide.

[nuke em]

Originally Posted by PriorityOne

I paid a reduced settlement after 5 years - shortfall was £26k on a joint liability debt of £52k. I paid £500 (F&F) around 8 years ago now..... and yes, you have read that right !

A lot depends on your personal circumstances and whether they think they can get any more out of you.... so box clever where you can. Years ago, I can remember reading about lenders being aware that they were unlikely to recover the full amount of a shortfall debt.... and would be prepared to negotiate, rather than chase token payments for years on end. I also read that they were unlikely to negotiate in writing in the first instance..... Both of these were true in my own situation.... but the F&F was put in writing (which I still have) and included a promise to amend the records at Experian.... which they did.

How much are you being chased for ?

I wonder why they would not want to deal with you in the first instance in writing ? also how come it lasted for 5 years , did you make payment during those 5 years or could they not just find you?

they have just started chasing me for 27k

[nuke em]

Originally Posted by debtsurvivor

Hi

I can only tell you what happened to my OH he was in a similar situation with the Halifax who were asking for a 42K shortfall when they sold the property in possession, we were shocked by the low price they sold at when we requested information. We decided to seek and pay for legal advice this was around 1998 the property had been sold in 1991. Together with the solicitor we gathered evidence that the property might have been sold at too low a price we ask for and was provided with the copy valuations reports that the lender obtained at the time of the sale. We then gathered historic evidence of property prices at the time, we even resorted to speaking with his old neighbours and wrote to the new residents in the property who obliged us with information regarding the condition when they purchased, and we were able to point to some inconsistencies in the reports produced.

OH attended the court personally together with myself the solicitor and a barister who spoke for him. The Judge was happy that OH seemed to have a counter claim and told the Halifax that they need to rethink their possiton and find a way to settle with him. After a further 3 months during which time a few letters were exchanged and it was agreed that in fact OH might have owed Halifax £10K as OH had no means of paying any lump sum and could only contribute a token payment from income (an exageration) what we decided to do was that I offered to pay £3K in full and final settlement I gave them 28 days to accept of my offer would be withdrawn leaving them to pursue OH through the court.

Halifax accepted we also paid £1200 in legal costs, we thought this was quite good value to make the whole thing go away in five months. Our local CAB were totally ineffective on this occaision, but they have been great on many other matters. I have to say that the expertise of the legal people gave us the mental toughness needed to see us through. However at that time we knew nothing about CAG and with the benefit of hindsight I think we may have tried the route Priority One took at least in the first instance.

Good luck with whatever action you decide.

yes thanks for that, i know i might have a case against the lender for selling off too cheap but i think this is a delaying tactic. I def think trying to get some cash together and make a F&F to them to clear it once & for all is the way to go if possible . Especially when they find out that i have 2 more props being sold at auction next month (both with different lenders) so more shortfall debt i guess as well.... Guess the whole lot will top out at circa 100k

[payingonlyencouragesthem]

Don't offer anyone anything yet. If it turns out at £100k I'd make sure all your creditors knew the position. You then offer them the choice of an F&F you can afford or bankrupting yourself so they get nothing at all. I feel you will get some tempting offers.

[nuke em]

Originally Posted by payingonlyencouragesthem

Don't offer anyone anything yet. If it turns out at £100k I'd make sure all your creditors knew the position. You then offer them the choice of an F&F you can afford or bankrupting yourself so they get nothing at all. I feel you will get some tempting offers.

i guess i'll hold on for now though, What should i be saying to the 1 lender who has started to phone up requesting " i get back to them asap etc" ?

[payingonlyencouragesthem]

Tell them to sit on it and spin for the time being. Just say you are selling 2 other properties (true) and will "be in a position to sort the problem out when they complete" (also true). Try to give them the impression there's cash in the pipeline without actually saying as much. It's very important in case it goes to court that you don't actually tell anyone any porkies.

[debtsurvivor]

Well yes as I said this was our experience your stiuation now that you have said is different. _ What POET says makes perfect sense to me in the circumstances you describe.