Debt over 10 years old

[JP08]

Thank you onmywayout, I will try that

[surfaceagentx20]

My assessment of the various posts on this thread shows that a series of debts owing by your ex only were combined into one large debt in regard to which you and your ex signed a voluntary charge over your joint interests in what was then your home.

It is evident that in dealing with the debt owing by your ex, the bank were able to persuade you to assume responsibility for that debt by causing you to enter into what is termed in the voluntary charge, a home owner loan agreement.

The voluntary charge read:

1) This deed is supplemental to a home owner loan agreement ("the agreement") of even date and made between the person(s) (the Borrower") and the Bank.

2) The borrower as beneficial owner herby charges the property referred to above ("the property") by way of legal mortgage with payment to the bank of all monies ("the mortgage debt") which now are or shall at any time herinafter be owing to the bank

1) under the agreement

2) under any agreement which may be made between the borrower and the bank after the date herof and expressley provides that it is to be secured by this legal charge ("a future legal charge") and

3) Under the provision of this legal charge ("the legal charge") by way of further security for the said monies herby assigns unto the bank all that the beneficial interest of the borrower in the property and the proceeds of sale thereof to hold the same unto the bank absolutely provided that on redemption of the legal charge the bank will at the request of the borrower re-assign to the borrower such beneficial interest.

The charge is currently registered on the property title as favouring HFC Bank. Can you write out the full text of the charge as it appears on the Register and also say whereabouts it appears on the Register? By that I mean, on the Charges Register is the charge described as a Registered Charge, as a Caution or a Restriction?

For the moment, I am treating the charge as created by way of mortgage.

I do not know if the property at that time was in your ex’s name or in joint names. It will be essential to know. Let me also whether your name and your ex’s name is on the Proprietorship Register today. Is you, him or the pair of you? For the time being I am assuming that it was in joint names and continues that way.

It will also be essential to know AND THIS IS IMPORTANT whether, prior to signing the voluntary charge you took legal advice and/or were urged by the creditor to take legal advice prior to signing? Again for the moment, I will assume that you did. The position will be very different if you were not urged to take legal advice prior to signing and did not in fact take legal advice. See the ine of cases beginning with Barclays Bank v O’Brien (1993)

After granting the voluntary charge you and your partner split up and that was followed by a CCJ. I assume this was a CCJ against him, not you or him and you? Please confirm who the judgment debtor(s) on the CCJ is/are and the date of the CCJ.

In January 2003 you received a letter from a DCA saying they had the debt. I am treating that as tantamount to an assignment of the benefit of the judgment debt by the original creditor to the DCA.

In 2007 the DCA took you to court to obtain a charging order. I do not know what grounds were relied upon in the application for the charging order and it would be helpful if you could produce the text? In any case the DCA withdrew that application. That the DCA took you to court to obtain a charging order under the CCJ suggests to me that the benefit of the voluntary charge was not assigned to them along with the judgment debt.

Today, the DCA threatens to have the charge, which I understand to mean the voluntary charge given back in 1990, registered in their name. To be able to do that they will need to take an assignment of the benefit of the voluntary charge. Has notice of an assignment of the benefit of the voluntary charge been delivered to you and if so, what does it say?

You tell us that you have been making payments to the bank (that would be the original creditor) ‘all the time’. When did you first make a payment to the bank and last make a payment to the bank and why did you make those payment(s)? Did you make the payment in response to some demand and if so can you post a copy of the demand or say what the demand was? Have you made any payments to the DCA since the debt was assigned in January 2003? If so, when did you make your first payment and when did you make your most recent payment?

Meantime your ex has vanished into thin air. No one knows where he is and he has defaulted on maintenance orders. There are outstanding committal proceedings and in those circumstances there is little wonder he is lying low.

There is a range of advice I might give at the moment but that would require further assumption on top of the series of assumption I have already made and would make this post complicated. If you could confine yourself to clearly answering as many of the questions I have asked in as much detail as possible, that would be helpful.

x20

[JP08]

Hi x20

Thank you vey much for this, I appreciate it, Please see my answers in blue against each question

 

My assessment of the various posts on this thread shows that a series of debts owing by your ex only were combined into one large debt in regard to which you and your ex signed a voluntary charge over your joint interests in what was then your home. Yes, you are correct. But I have never lived anywhere else other than where I am now since 1987.

It is evident that in dealing with the debt owing by your ex, the bank were able to persuade you to assume responsibility for that debt by causing you to enter into what is termed in the voluntary charge, a home owner loan agreement.

Yes, I would say bullied by both the Bank and my ex as it being the only way out

 

The voluntary charge read:

 

1) This deed is supplemental to a home owner loan agreement ("the agreement") of even date and made between the person(s) (the Borrower") and the Bank.

 

2) The borrower as beneficial owner herby charges the property referred to above ("the property") by way of legal mortgage with payment to the bank of all monies ("the mortgage debt") which now are or shall at any time herinafter be owing to the bank

1) under the agreement

2) under any agreement which may be made between the borrower and the bank after the date herof and expressley provides that it is to be secured by this legal charge ("a future legal charge") and

3) Under the provision of this legal charge ("the legal charge") by way of further security for the said monies herby assigns unto the bank all that the beneficial interest of the borrower in the property and the proceeds of sale thereof to hold the same unto the bank absolutely provided that on redemption of the legal charge the bank will at the request of the borrower re-assign to the borrower such beneficial interest.

 

The charge is currently registered on the property title as favouring HFC Bank. Can you write out the full text of the charge as it appears on the Register and also say whereabouts it appears on the Register? By that I mean, on the Charges Register is the charge described as a Registered Charge, as a Caution or a Restriction?

The land Registry document that I have is dated 3rd March 2000, but it does not appear to have changed according to my solicitor when the DCA tried to take me to court to get a second charge added for the same debt. it reads on page 1

Proprietorship Register

Title Absolute

(4th September 1989) Restriction: Except under an order of the registrar no disposition by the Proprietor (s)of the land is to be registered without the consent of the Proprietor (s) of the charge dated 30 August 1989 in favour of HFC Bank PLC reffered to in the charges register

Page 2 C Charges Register

4) (4th September 1989) REGISTERED CHARGE dated 30th August 1989 to secure the moneys including the further advances therein mentioned

5) (4th September 1989) Proprietor (s) HFC Bank PLC (Co. Regn No XXXXXXXXXX)

of Mortgage centre PO Box 1523 Birmingham B1 3PU

 

 

For the moment, I am treating the charge as created by way of mortgage.

 

I do not know if the property at that time was in your ex’s name or in joint names. It will be essential to know. Let me also whether your name and your ex’s name is on the Proprietorship Register today. Is you, him or the pair of you? For the time being I am assuming that it was in joint names and continues that way.

At the time it was in joint names and 3rd March 2000 it was transfered in to my name only

 

It will also be essential to know AND THIS IS IMPORTANT whether, prior to signing the voluntary charge you took legal advice and/or were urged by the creditor to take legal advice prior to signing? Again for the moment, I will assume that you did. The position will be very different if you were not urged to take legal advice prior to signing and did not in fact take legal advice. See the ine of cases beginning with Barclays Bank v O’Brien (1993)

 

No, there was no legal advice, the document was given to my ex to bring home to nag me in to signing it. I was going through a very bad pregnancy at the time.

After granting the voluntary charge you and your partner split up and that was followed by a CCJ. I assume this was a CCJ against him, not you or him and you? Please confirm who the judgment debtor(s) on the CCJ is/are and the date of the CCJ.

This is where it gets confusing, There were a number of judgments against my ex's name and 1 in my name separatley.,When I did a full credit search on all 3 agencies. None of them say HFC Banks name but they are for the same amounts. there are also other ones just in his name. I have listed them below.

Mr xxxxx Date 07/92 amount £341 -Judgement

Mr XXXXX Date 07/92 amount £544 - Judgement

Mr xxxxx Date 07/92 amount £110 - Judgement

Mr xxxxx Date 02/89 amount £1461 - Judgement

Mrs xxxx Date 02/89 amount £1461 - Judgement

Mr xxxx Date 07/91 amount £100 - Judgement

There are no judgements showing at all now.

Then there were 2 defaults that I could see at that time.

Mr xxxxxx HFC Bank credit card/Revolving credit started 08/03/89 Default £5226 defaulted 26/03/92

Mrs xxxxxx HFC Bank Mortgage started 30/10/90 default £36108 defaulted 01/06/94 Balance 35750?

I believe that the same one for the above was put where he was living at the time with his new wife and followed him around whenever he moved in just his name.

There is also the entry of deliquent account 01/06/02 balance £0 on a credit ref agency

 

In January 2003 you received a letter from a DCA saying they had the debt. I am treating that as tantamount to an assignment of the benefit of the judgment debt by the original creditor to the DCA. - ok

 

In 2007 the DCA took you to court to obtain a charging order. I do not know what grounds were relied upon in the application for the charging order and it would be helpful if you could produce the text? In any case the DCA withdrew that application. That the DCA took you to court to obtain a charging order under the CCJ suggests to me that the benefit of the voluntary charge was not assigned to them along with the judgment debt.

They withdrew the case before it actually got to court, I received a claim form. It only had my name on it and all it said was

Brief details of claim

Balance of monies due under an agreement in writing.

Particulars of claim

inv amount £33,510.09 dated 30/10/90 due 06/01/03 less amount paid £625.00 and the claimant claims £32,885.09 plus court fee of £400 and solicitors fee of £100.00. (There was no copy of the agreement in writing attached) They withdrew as soon as they were informed by my solicitor that I would defend the whole amount as there was already a charge on the property.

(what they had said to me just before they did this was they would only continue to accept £15 p/month if they could put a charge on my house but they promised that they would not try and take my house off of me if I consented?) I have this in writing I could type it out for you if you wish?

They did not know about the Charge until the court case and when the FOS got involved after I complained about the harrasment from the DCA, they told the ombudsman that I quote "looking at the papers, there does appear to be some confusion about the legal charge taken by HFC. that charge remains in place and secures the debt. The notice at the Land registry will be updated by Hillesden if there is some change in the position. Hillesden have reduced the debt by £1000 (they have not) in recognition that you were put to some costs - and inconvenience, whilst the position regarding the charge was clarified.

The confusion abou the charge impacted on the information you were given regarding possible settelment and although there was some suggestion that Hillesden would cap your liability at 50% of the debt it seems that once it became aware of the charge it changed it's settlement criteria. That offer is no longer available to you, but Hillesden may be prepared to agree some form of lump sum settlement.

I see that there is some difficulties with the discussions regarding payments in reduction of the debt. Hillesden is entitled to request payments and will generally need to know your financial position so that a resonable level of payment can be agreed. They did not uphold my complaint.

Today, the DCA threatens to have the charge, which I understand to mean the voluntary charge given back in 1990, registered in their name. To be able to do that they will need to take an assignment of the benefit of the voluntary charge. Has notice of an assignment of the benefit of the voluntary charge been delivered to you and if so, what does it say? No, I have not received anything. HFC have been trying to call me a few times, all bar the last time they did not even say who they were from. I am not sure whether to call them or not, but I think it may be to do with the subject access request. There was a note to say not to send me anything without proof of ID on the database information I received, however someone sent it to me anyway. No notice of assignment though. The information above in red is the last I have heard apart form these calls I have been receiving from HFC.

Should I call them or just wait for them to send me something in writing?

 

You tell us that you have been making payments to the bank (that would be the original creditor) ‘all the time’. When did you first make a payment to the bank and last make a payment to the bank and why did you make those payment(s)? Did you make the payment in response to some demand and if so can you post a copy of the demand or say what the demand was? Have you made any payments to the DCA since the debt was assigned in January 2003? If so, when did you make your first payment and when did you make your most recent payment?

I did not pay anything to the bank for a while as we had agreed (my ex and I) if I take on the mortgage and the other household debts that he had not paid. He was to be responsible for this debt as it was his anyway. he never did pay it and then they tried to get income support to pay it as I had 2 babies to look after and could not afford to pay a childminder to go to work. Income support refused as they would not give them a breakdown of the charges. I started paying about £5 a month to start with after receiving letters that said things like"We must now insist that you either telephone us or pay the overdue amount immediately. we have trained staff available to help resolve an difficulties ou may be experiencing and we prefer to reach a mutually acceptable arrangement to bring accounts up to date.

If you fail to respond to this letter, we may serve you with a default notice in accordance with section 87 (1) of the consumer credit act 1974. Additional charges will then be incurred and we may decide to take legal proceedings against ou to recover the total amount outstanding."

This was around 1994 (Ithink) and once i started work again I increased payments even though I could not afford to, the last payment had already gone off for Jan 2003 before I received the letter from the DCA. I then started paying them from then on until now. Most recent payment end of August 2008, as I have been afraid of loosing my home. I did take my ex to court and the Judge ruled he pay me a second maintenance order by way of deductions from earnings order in order to pay this debt but this has never been actioned, so I have paid what I could to keep them off my back.

Meantime your ex has vanished into thin air. No one knows where he is and he has defaulted on maintenance orders. There are outstanding committal proceedings and in those circumstances there is little wonder he is lying low. he does not know about the comittal proceedings as he had already left that address before they sent the documents, but yes he has managed to always change Jobs and addresses to avoid paying anything.

 

There is a range of advice I might give at the moment but that would require further assumption on top of the series of assumption I have already made and would make this post complicated. If you could confine yourself to clearly answering as many of the questions I have asked in as much detail as possible, that would be helpful.

 

x20

Thank you so much for this, Sorry it is so long.

Regards

JP

[JP08]

I have just twigged the charge on the house is dated August 1989, the copy of the agreement that I have been sent is dated the 30th October 1990, unsigned as well as the wrong address? How can this be?

[surfaceagentx20]

The home owner loan agreement would have to be dated the same or an earlier date to that of the voluntary charge. A voluntary charge could not have derived from an agreement post-dating it. It must be some other agreement, alternatively some agreement which operates to modify the earlier agreement. Might that be so?

 

Thanks for yourr detailed response. I'm looking into things. I may have some more questions. I'll post my thoughts once I've got my head around it all.

 

One short question - were there ever any mortgage possession proceedings brought by the bank and if so, when and what was the result?

 

x20

[Billyhunt]

Hi JP08 Glad to see you are getting some excellent expert advice from surfaceagentx20. Your situation certainly calls for it. Very complicated paperwork to sift through. I am around for the next couple of days, so will keep an eye on your thread and chip in if I can.

 

Good luck.

[surfaceagentx20]

OK, what follows is a bunch of thoughts at the moment, hopefully in some sort of comprehendible sequence, as I try and figure my way through this mine field.

The agreement in issue originated with the home owner loan agreement and by which a voluntary charge was placed on the property at a time when it was held by JP08 and her ex. The charge dates back to 30 August 1999, registered on the title on 4 September 1989. The agreement giving rise to that charge must coincide or pre-date that charge. There is a question mark over whether the agreement was subsequently modified on 30 October 1990.

The agreement was a secured loan and the charge was to operate as a mortgage given under the hand of the borrowers (as to which there are questions of avoidability adopting the decision in Barclays Bank v O’Brien [1993].

Evidently there was default in repayments. Proceedings issued resulting in a CCJ. I do not know when that was but I suspect it was many years ago. JP08 refers to receiving a default notice in about 1994 and the account in question is marked ‘defaulted 1 June 1994’. I suspect therefore that the proceedings issued around this time and that the judgment issued soon afterwards.

Those proceedings would almost certainly be proceedings against both JP08 and her ex as the persons liable under the agreement. I can not imagine why the bank would only prosecute a claim against one where both had signed the loan agreement and both (then) owned the property on which the loan was secured.

Likewise, since the proceedings related to default of a loan agreement secured by way of mortgage, I would imagine the proceedings would have been mortgage possession proceedings. But I can not be certain of this because first it is not confirmed the proceedings were mortgage proceedings. If there were mortgage possession proceedings which resulted in a judgment, the judgment would be for [1] the money due under the mortgage and [2] delivery up of the property.

If the judgment was a judgment for possession in mortgage possession proceedings with a money judgment bolted on there are 2 effects. [1] the bank can issue a warrant for possession of the property if it is not voluntarily handed over and [2] the amount payable upon the mortgage becomes payable forthwith; not payable under the instalment arrangements set out in the agreement.

If so, a warrant has never issued. A warrant may only be issued upon the expiration of 6 years from the date of the possession order with the permission of the court (see: CCR O26 r5). In other words, the court retains discretion to refuse permission. The exercise of discretion in such circumstances has been tested to the extent that the exercise of the court’s discretion to allow the issue of a warrant outside the 6 year period may only be justified in circumstances where the facts of the case took it outside the general rule (See: Patel v Singh [2002]) and cases cited.

I am told the proprietors of the property changed hands on 3 March 2000 from JP08 and ex to just JP)*. This event I would have thought, would post-date the judgment. Further, I would have thought it would have required permission from the bank unless the transfer from JP08 and ex to just JP08 was made pursuant to an order of the Family Court, perhaps after a direction of the Family Court that the bank should appear as intervenor, alternatively, JP08 agreed to shoulder personal responsibility for the bank’s debt and the bank agreed to release JP08’s ex from it. Any of that ring true?

Besides the right to possession there would be the right to the money. It would appear the money liability had reached the level of £36,108.00 by 30 October 1990, had reduced to £35,750.00 by 1 June 1994 and had reduced to a lower sum of £33,510.79 by 6 January 2003. This latter date is probably the date on which the DCA acquired the debt from the bank.

The liability to pay the debt (the judgment debt) would have crystalised on the making of the possession order. The recoverability of Judgment Debt Act interest on that judgment would be subject to the restriction imposed by Limitation Act 1980 section 24(2).

Section 24 says:

‘Time limit for actions to enforce judgments.’

(1) An action shall not be brought upon any judgment after the expiration of six years from the

date on which the judgment became enforceable.

(2) No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due.

Further still, recovery of that liability by warrant would be subject to the same restrictions imposed by CCR O26 r5 on warrants of possession.

If mortgage possession proceedings were not brought, then the proceedings could only have been for money due. In that event the preceding two paragraph apply to that money judgment.

Additionally, if mortgage possession proceedings were not brought, then the fact that the bank had a right to and did bring proceedings for the money secured under the voluntary charge would demonstrate that no later than the date on which the bank brought the money claim, the bank had a co-existing right to bring mortgage possession proceedings. Alternatively, the money judgment had the effect of crystalising the bank’s right to receive the entire sum of money secured by way of the voluntary charge (not just the arrears). In either event Limitation Act 1980 section 20(2) and (4) would come into effect.

These sub-sections provide as follows:

Section 20(2) says:

No foreclosure action in respect of mortgaged personal property shall be brought after the expiration of 12 years from the date on which the right to foreclose accrued.

and

Section 20(4) says:

Nothing in this section shall apply to a foreclosure action in respect of mortgaged land, but the provisions of this Act relating to actions to recover land shall apply to such action.

In Doodes v Gotham [2005] Lindsey held the time limit for bringing proceedings to enforce a charge was 12 years. Doodes was concerned with a charge obtained in bankruptcy, the effect of which was later reversed by the Court of Appeal. But the judgment makes clear that the overruling was owing only to the fact that the charge had been obtained post-bankruptcy and would be in keeping with section 20 in all other situations.

In short, it seems to me that if there were mortgage possession proceedings and possession has not been given up under the possession order, the bank will now be prohibited from seeking a warrant unless the judgment was made within the last 6 years.

Likewise, if there have been no mortgage possession proceedings, those proceedings will be barred by Limitation Act 1980 section 20.

A money judgment is enforceable without restriction save where there is an obligation to obtain leave as required under CCR O.26. Issues concerned with whether a judgment was subject to restrictions under Limitation Act 1980 section 24(1) were considered and rejected by HL in Lowsley v Forbes [1999]. The restriction applies only to actions upon the judgment not enforcement steps taken within the action giving rise to the judgment.

What steps could the creditor take within the action by way of enforcement?

The only step of worth, it seems to me, would be a step by way of charging order. That said I would contend the court would find it perverse to grant a charging order on land to secure a money judgment when in truth the money payable under that judgment had been secured by a voluntary charge on the same property made as long ago as 1989. Further still, the grant of a charging order today would have the effect of [1] undermining the intention of Parliament that after the grant of a mortgage on land securing money which the beneficiary of the charge was entitled to receive, proceedings were to brought within the 12 year limitation period and [2] depriving JP08 of the benefit of that limitation period.

There may have been a reason why the bank did not bring mortgage possession proceedings. That reason may have been that the bank felt that if they did so, the circumstances surrounding the way they obtained the voluntary charge were susceptible to the defence advanced in Barclays Bank v O’Brien. I won’t rehearse the defence here, but suffice to say the circumstances in O’Brien are rather similar. Further, the voluntary charge, having been given in 1989, it pre-dates the O’Brien decision and would have been made at a time when banks were not taking the kind of care to safeguard ‘uninvolved’ spouses which they do nowadays.

If I am right about that surmise, a third reason to oppose a charging order would be that the grant of a charging order would operate to circumvent the O’Brien defence JP08 would have been able to advance had the bank prosecuted a mortgage possession claim. Alternatively, JP08 might advance an O’Brien type defence to an application for a charging order in order to test whether the defence would have had merit. Ordinarily I would have contended that a plain money judgment would not admit argument of this sort, but given what would be the perverse result were a charging order made (ie charge on property for money replaces potentially avoidable charge on the same property for the same money), the court may well be inclined to consider that justice requires consideration be given to this question.

There is one outstanding question which concerns me and that relates back to what may have gone on when the property was transferred from JP08 and ex to JP08. The transfer may have involved conditions effecting JP08’s contractual relationship with the bank either by order of the court or by promises made in consideration of its consent to the transfer. This will need investigating.

As I said at the beginning, all of the above is a collection of thoughts set out in what I hope is a logical sequence. It is not a statement or even an opinion on the law as it applies to JP08’s case because I don’t know for sure. All I can say is that there are reasons to suppose it just might.

 

x20

[JP08]

Hi x20

I am not sure if there was an earlier agreement/change of account or not?

I suppose they could have had a different account number before? I will drag out all of my files again tonight and see if I can find any changes, but a lot of it went with my ex when he left as I told him to sort it out. But I will try.

The home owner loan agreement would have to be dated the same or an earlier date to that of the voluntary charge. A voluntary charge could not have derived from an agreement post-dating it. It must be some other agreement, alternatively some agreement which operates to modify the earlier agreement. Might that be so?

 

Thanks for yourr detailed response. I'm looking into things. I may have some more questions. I'll post my thoughts once I've got my head around it all. Thank you

 

One short question - were there ever any mortgage possession proceedings brought by the bank and if so, when and what was the result?

Not that I know of, the only letters I have seen lately just threaten a CCJ but again, I will see what I can find out tonight.

Thanks again

JP

x20[/quote

[JP08]

Hi Billy thank you for your encouragement, I have been fighting this for the past 18 years + and it is doing my head in.

 

x20, I am just going though my documents to see if I can find anything prior to 1990. I will update the rest of your questions shortly I hope

 

Thanks

JP

[JP08]

Hi x20

I have added responses in blue below

 

OK, what follows is a bunch of thoughts at the moment, hopefully in some sort of comprehendible sequence, as I try and figure my way through this mine field.

 

The agreement in issue originated with the home owner loan agreement and by which a voluntary charge was placed on the property at a time when it was held by JP08 and her ex. The charge dates back to 30 August 1999, registered on the title on 4 September 1989. The agreement giving rise to that charge must coincide or pre-date that charge. There is a question mark over whether the agreement was subsequently modified on 30 October 1990.

Ok, could not find anything in my files, however on their loan system database I can see a Charged off account with 2 more account numbers: CACS :in collections. Note date : 30/10/90 I guess this must be it? But the charge off date is 23/06/94?

 

The agreement was a secured loan and the charge was to operate as a mortgage given under the hand of the borrowers (as to which there are questions of avoidability adopting the decision in Barclays Bank v O’Brien [1993].

 

Evidently there was default in repayments. Proceedings issued resulting in a CCJ. I do not know when that was but I suspect it was many years ago. JP08 refers to receiving a default notice in about 1994 and the account in question is marked ‘defaulted 1 June 1994’. I suspect therefore that the proceedings issued around this time and that the judgment issued soon afterwards. Yes there were proceedings for a CCJ I think it was 1991 but I cannot be sure. There was a caution registered on the property according to their records in January 91, so I guess it must have been somewhere around then.

 

Those proceedings would almost certainly be proceedings against both JP08 and her ex as the persons liable under the agreement. I can not imagine why the bank would only prosecute a claim against one where both had signed the loan agreement and both (then) owned the property on which the loan was secured. It was both of us, his CCJ kept following him around.

Likewise, since the proceedings related to default of a loan agreement secured by way of mortgage, I would imagine the proceedings would have been mortgage possession proceedings. But I can not be certain of this because first it is not confirmed the proceedings were mortgage proceedings. If there were mortgage possession proceedings which resulted in a judgment, the judgment would be for [1] the money due under the mortgage and [2] delivery up of the property. no I don't think it was for possesion of the property, At the time there was no equity in the property and they were not the first charge. The first charge was on the brink of taking repossesion because that account was in arrears as well,he did not pay anything to anyone. but I turned it around by Taking my ex's name off the property and sticking to an agreement on repayments, HFC Agreed to the taking his name off the property but he is still responsible for this HFC debt. I can see that entry on their database dated 08/06/1999. I also have my solicitors letters to that effect.

 

If the judgment was a judgment for possession in mortgage possession proceedings with a money judgment bolted on there are 2 effects. [1] the bank can issue a warrant for possession of the property if it is not voluntarily handed over and [2] the amount payable upon the mortgage becomes payable forthwith; not payable under the instalment arrangements set out in the agreement. There was a charge off on the 23/06/94 for this last account number where the balance is showing zero. All payments after that date were set against a zero balance and a description of "Recovery" until it was sold to Hillesden in April 2003, the DCA sent me the letter saying they had taken it over at the beginning of Jan 2003

 

If so, a warrant has never issued. A warrant may only be issued upon the expiration of 6 years from the date of the possession order with the permission of the court (see: CCR O26 r5). In other words, the court retains discretion to refuse permission. The exercise of discretion in such circumstances has been tested to the extent that the exercise of the court’s discretion to allow the issue of a warrant outside the 6 year period may only be justified in circumstances where the facts of the case took it outside the general rule (See: Patel v Singh [2002]) and cases cited.

 

I am told the proprietors of the property changed hands on 3 March 2000 from JP08 and ex to just JP)*. This event I would have thought, would post-date the judgment. Further, I would have thought it would have required permission from the bank unless the transfer from JP08 and ex to just JP08 was made pursuant to an order of the Family Court, perhaps after a direction of the Family Court that the bank should appear as intervenor, alternatively, JP08 agreed to shoulder personal responsibility for the bank’s debt and the bank agreed to release JP08’s ex from it. Any of that ring true?

I took my ex to court under family law as he had left me with all of the debt, I had lost my Job and was only on benefits with 2 babies. My solicitor wrote to HFC Bank to get them to agree to my taking his name off the property but not this debt. Only the first charge had his name taken off. The Judge also stipulated that he pay this debt by order of maintenance on a deduction from earings order. However it appears that I have to find him myself before the court will action this and he keeps disappearing.

 

Besides the right to possession there would be the right to the money. It would appear the money liability had reached the level of £36,108.00 by 30 October 1990, had reduced to £35,750.00 by 1 June 1994 and had reduced to a lower sum of £33,510.79 by 6 January 2003. This latter date is probably the date on which the DCA acquired the debt from the bank. yes that is when they took it over.

 

The liability to pay the debt (the judgment debt) would have crystalised on the making of the possession order. The recoverability of Judgment Debt Act interest on that judgment would be subject to the restriction imposed by Limitation Act 1980 section 24(2).

 

Section 24 says:

‘Time limit for actions to enforce judgments.’

(1) An action shall not be brought upon any judgment after the expiration of six years from the

date on which the judgment became enforceable.

 

(2) No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due.

 

Further still, recovery of that liability by warrant would be subject to the same restrictions imposed by CCR O26 r5 on warrants of possession.

 

If mortgage possession proceedings were not brought, then the proceedings could only have been for money due. In that event the preceding two paragraph apply to that money judgment.

 

Additionally, if mortgage possession proceedings were not brought, then the fact that the bank had a right to and did bring proceedings for the money secured under the voluntary charge would demonstrate that no later than the date on which the bank brought the money claim, the bank had a co-existing right to bring mortgage possession proceedings. Alternatively, the money judgment had the effect of crystalising the bank’s right to receive the entire sum of money secured by way of the voluntary charge (not just the arrears). In either event Limitation Act 1980 section 20(2) and (4) would come into effect.

 

These sub-sections provide as follows:

 

Section 20(2) says:

No foreclosure action in respect of mortgaged personal property shall be brought after the expiration of 12 years from the date on which the right to foreclose accrued.

 

and

 

Section 20(4) says:

Nothing in this section shall apply to a foreclosure action in respect of mortgaged land, but the provisions of this Act relating to actions to recover land shall apply to such action.

 

In Doodes v Gotham [2005] Lindsey held the time limit for bringing proceedings to enforce a charge was 12 years. Doodes was concerned with a charge obtained in bankruptcy, the effect of which was later reversed by the Court of Appeal. But the judgment makes clear that the overruling was owing only to the fact that the charge had been obtained post-bankruptcy and would be in keeping with section 20 in all other situations.

 

In short, it seems to me that if there were mortgage possession proceedings and possession has not been given up under the possession order, the bank will now be prohibited from seeking a warrant unless the judgment was made within the last 6 years.

 

Likewise, if there have been no mortgage possession proceedings, those proceedings will be barred by Limitation Act 1980 section 20.

 

A money judgment is enforceable without restriction save where there is an obligation to obtain leave as required under CCR O.26. Issues concerned with whether a judgment was subject to restrictions under Limitation Act 1980 section 24(1) were considered and rejected by HL in Lowsley v Forbes [1999]. The restriction applies only to actions upon the judgment not enforcement steps taken within the action giving rise to the judgment.

 

What steps could the creditor take within the action by way of enforcement?

 

The only step of worth, it seems to me, would be a step by way of charging order. That said I would contend the court would find it perverse to grant a charging order on land to secure a money judgment when in truth the money payable under that judgment had been secured by a voluntary charge on the same property made as long ago as 1989. Further still, the grant of a charging order today would have the effect of [1] undermining the intention of Parliament that after the grant of a mortgage on land securing money which the beneficiary of the charge was entitled to receive, proceedings were to brought within the 12 year limitation period and [2] depriving JP08 of the benefit of that limitation period.

 

There may have been a reason why the bank did not bring mortgage possession proceedings. That reason may have been that the bank felt that if they did so, the circumstances surrounding the way they obtained the voluntary charge were susceptible to the defence advanced in Barclays Bank v O’Brien. I won’t rehearse the defence here, but suffice to say the circumstances in O’Brien are rather similar. Further, the voluntary charge, having been given in 1989, it pre-dates the O’Brien decision and would have been made at a time when banks were not taking the kind of care to safeguard ‘uninvolved’ spouses which they do nowadays.

 

If I am right about that surmise, a third reason to oppose a charging order would be that the grant of a charging order would operate to circumvent the O’Brien defence JP08 would have been able to advance had the bank prosecuted a mortgage possession claim. Alternatively, JP08 might advance an O’Brien type defence to an application for a charging order in order to test whether the defence would have had merit. Ordinarily I would have contended that a plain money judgment would not admit argument of this sort, but given what would be the perverse result were a charging order made (ie charge on property for money replaces potentially avoidable charge on the same property for the same money), the court may well be inclined to consider that justice requires consideration be given to this question.

 

There is one outstanding question which concerns me and that relates back to what may have gone on when the property was transferred from JP08 and ex to JP08. The transfer may have involved conditions effecting JP08’s contractual relationship with the bank either by order of the court or by promises made in consideration of its consent to the transfer. This will need investigating. I took my ex to court, it was agreed to my taking his name off of the property but not this debt. HFC were happy to agree to this so long as he remained liable for the debt. My ex I knew, would try and force me to sell once there was any equity in the property, I have really suffered and so have my kids paying off the amount of debt he brought upon us. He did try years later and failed miserably when it was known that he had no interest legally in the property.

 

As I said at the beginning, all of the above is a collection of thoughts set out in what I hope is a logical sequence. It is not a statement or even an opinion on the law as it applies to JP08’s case because I don’t know for sure. All I can say is that there are reasons to suppose it just might.

Hopefully what I have added helps? There is a lot of legal jargon above, but does this mean that the charge is no longer enforcable? Thank you so much for the amount of time you have spent on this already. I know this is a complicated case, I have been told this by the CAB and were informed that it was too complicated for them to deal with in the end.

Thank you Again

JP08

 

x20

[surfaceagentx20]

That’s helpful again, thanks.

So in all likelihood the bank did not bring possession proceedings even though it held security on the land. And the reason for this was, that taken together with the first charge, the total indebtedness secured on the house exceeded the net value of the house so that, if the bank sought to enforce its charge (being by way of second charge) as mortgagee in possession, it would have to apply any sale proceeds in accordance with the priority, ie, discharge the sums due to the first mortgagee first with the risk that what would remain would be insufficient to meet the liability owing to the bank.

Instead, the bank took proceedings for the money only. Obtaining a money judgment enabled the bank to enforce the debt by means other than by the voluntary charge. By a warrant or by an attachment of earnings order for example. But it did none of those things.

Even so, it does not alter the fact, in my opinion, that the acquiring of the money judgment rendered the entire sum due under the agreement immediately payable. In reality, the first time there was a failure to meet the instalments due under the home owner’s loan agreement gave rise to such a right. In other words, on a day no later than the day on which the bank acquired its money judgment, time began to run against the bank to begin proceedings for foreclosure under the voluntary charge. The right to begin such proceedings expired at the latest, on the twelfth anniversary of that judgment. Unless the judgment was obtained on a day later than 9 September 1996, the right to bring proceedings for foreclosure was lost for all time, That would be lost for all time to both the bank and anyone taking an assignment of that charge. Evidently, the DCA did not take an assignment of the charge.

It would be helpful to identify the precise date on which the money judgment was obtained. Do you have any papers which would enable you to check with the court office? You would need to identify the court and the case number. The court should be able to do the rest with this information.

On the basis the judgment was not obtained on a day later than 9 September 1996, I hold to the view on what you have told me, that the voluntary charge is now no longer enforceable by operation of section 20(2) and (4) of The Limitation Act 1980.

That then leaves the money judgment. This judgment was assigned to the DCA in January 2003, nearly six years ago. Again, on the basis the judgment was not obtained on a day later than 9 September 1996, the money judgment will be upwards of 12 years old. In my view, an application to enforce by warrant of execution will fail because the DCA will be unable to demonstrate a good reason why leave to enforce should be granted for a warrant (see CCR O 6, r.25) and meet the stringent requirements set out in Patel v Singh quoted in an earlier post of mine.

A fresh action could not be brought on the judgment in order to renew some other limitation period. The right to bring a new action expired 6 years after the original judgment (see Limitation Act 1980 section 24) Further, by the same section, any power to recover interest on that judgment has been lost.

I have already discussed how I take the view that an application for a charging order could be resisted.

There’s not much left for the DCA to do. What about bankruptcy?

In Ridgeway Motors v ALTS Limited [2005], the court held that Limitation Act 1980 s24 was not a bar to the presentation of a winding up petition even though the judgment on which the petition was founded was a judgment older than 6 years. ALTS were assignees of a costs judgment obtained by the assignor on 14 January 1998. On 3 February 2004, ALTS presented its petition to wind up Ridgeway. ALTS were allowed to proceed.

However, although winding up proceedings and bankruptcy are very similar in purpose, to be able to present a petition in bankruptcy it will be necessary in the case of an individual to first serve a statutory demand under Insolvency Act 1986. Unlike in winding up proceedings, a demand served upon a nindividual can.

In Re a Debtor [1997] Ch 310 a creditor appealed the setting aside of a statutory demand which was based upon a default judgment obtained in excess of six years prior to service of the demand. Baker J, sitting in the Chancery Division dismissed the appeal holding that bankruptcy proceedings based on a statutory demand for moneys due under a previous default judgment constituted "an action upon a judgment" within s24(1). Insolvency proceedings constituted a fresh action or proceeding newly brought, of the kind described in Lamb, rather than a proceeding under the judgment previously obtained. Bankruptcy proceedings were not, the judge held, a method of, nor were they akin to, enforcing or executing a judgment outside s24(1). As more than 6 years had elapsed since the default judgment became enforceable, bankruptcy proceedings based on it in the statutory demand would be statute barred by s24(1).

This decision of course pre-dates Ridgeway and may be difficult to square with it. Nonetheless, I imagine a court would be content to set aside a demand based upon the particular money judgment in this case given its very great age (note in Ridgeway the six years had only overrun by a week or two) coupled with an argument which sought to adopt a cross claim for damages arising out of an O’Brien style defence.

For these reasons I have doubts that the DCA could properly take enforcement proceedings. For a kick off they would need to apply in any proceedings to be substituted as judgment creditor. Objection might be raised in that regard too. No enforcement steps have been taken or when they were taken, they were swiftly withdrawn.

I am by no means persuaded that the DCA presents a serious threat. On the contrary, for the reasons discussed, I think their position rather weak.

 

x20

[JP08]

Hi x 20

 

You have been so helpful in this, I appreciate it very much. I will digest what you have said when I get home tonight and try and find out about the date of the CCJ.

I noticed last night when I was reading through some more of HFC's database bumpf that they had been updating the database with emails back in 2007, don't know who they were emailing and also a letter of authority was also sent in 07, I have not got this with me but I can add the dates tonight if you need them? They must have sent it to this address that they had me down as living at. I am not sure if they have been trying to collect on the debt as well as the DCA but obviously having the wrong address I have never received anything.

There was also a maturity date of the year 2015 on the database, does this mean anything?

I don't think this copy of agreement is valid anyway with the wrong address on it is it?

I just need to know incase the phone calls start again, not heard anything since Friday.

I will gather the other information tonight and add to the thread.

Again thanks for your help, trying to unravel this on my own and getting frustrated by the FOS responses has been really stressful.

JP08

[JP08]

Hi x20

 

I have looked through the old credit ref agency reports again and the last CCJ recorded on all 3 credit ref agencies was 02/89. It has the court name and also the case number. The last requests that I did for all 3 agencies was in April 2006 and I cannot see any others in between. in 2006 there were no CCJ's recorded then and none since. is there a department I would need to write to at the court and what should I say?

 

I was still paying them up until the end of 2002 so I would imagine I would have received any other CCJ's as they had the correct address then and they would also have shown up on my reports wouldn't they?

 

On the default there never was a court hearing or CCJ, just the default turning up on my credit file. But even that was June 94.

 

As I mentioned earlier though, going through their primary collection data it shows some emails sent somewhere but no other details on the 24th and 25th May 2007.

 

Also a letter of authority in Jan 07?

Why would a letter of Authority be sent 5 years after they sold the debt on? and it does not say to who either?

They have said on the covering letter that the pack would include any manual letters issued to me (none) but any system generated letters cannot be enclosed as they do not keep copies? I think that this is against the data compliance act isn't it?, emails in particular and a Letter of authority would come under a manual letter would it not?

 

This maturity date of 2015 I hope I am right in thinking that as they sold the debt on and the a/c was closed that this would be nothing to worry about, am I right? I hope so.

 

I think this is enough to be going on with, sorry there are so many questions, but I think it is the onl way of getting it sorted out.

 

Thanks

JP

[JP08]

Hi

what should I do next?

 

I am still wondering why emails and a letter of Authority were sent out early 2007 as well? when the account is closed and was sold on to the DCA in Jan 2003?

Anyone any ideas?

x 20 now that I have found the case number and court how should I go about finding out more information from the court? is there a specific department to write to?

 

Thanks

JP08

[JP08]

Hi

what should I do next?

 

I am still wondering why emails and a letter of Authority were sent out early 2007 as well? when the account is closed and was sold on to the DCA in Jan 2003?

Anyone any ideas?

x 20 now that I have found the case number and court how should I go about finding out more information from the court? is there a specific department to write to?

 

Thanks

JP08

 

Hi

Is there anyone that can advise me?

Thanks

JP08

[surfaceagentx20]

JP08, Telephone the court office on Monday and tell them who you are and the case number. Find out when the judgment was obtained and ask for details of all enforcement action taken since.

 

Let me know what you find out.

 

Banks sell off delinquent debts and there are DCAs who buy them. They sell them for next to nothing because that's all they are worth. They are only of value to a DCA which doesn't mind having a less than scrupulous reputation. They pursue these debts and present them to people as if they are payable. They pursue them so ferociously people pay up without realising the debt is unenforceable. If just 'one in ten' are paid the DCA makes a profit.

 

x20

[JP08]

Hi x20, Thank you for this, I will find out the number and call them

 

Thanks again

JP08

[JP08]

I have tried 16 times to call the court now and I think there is something wrong with their phone lines. It rings twice and then gets cut off, so I will have to try again tomorrow. There do not seem to be any other numbers available to call.

[surfaceagentx20]

What's the name of the court?

 

x20

[JP08]

Hi x20

 

It is Reading County Court

 

Thanks

JP08

[JP08]

Hi x20

 

Ok, I have called the court and they said that they do not recognise the case number as one that they have on their systems. I know it was at that court, or it is the only one that I ever knew about anyway. On the credit report it states the source as the Lord Chancellors department????? anyway, they just said that it is well over 6 years old and is invalid. they could not help any further than that.

 

This is what I have now:

 

The only CCJ that I know about with my name on it was for just £1461 in 02/89 according to credit ref agencies - case number not recognised according to the court.

 

There are a number of other CCJ's in my ex's name only, but not sure which ones relate to this debt- one was the same case number as the one in my name above, others some at Reading and others at Northampton.

All his accounts were merged in October 1990 by the looks of things

Default 01/06/094

Charge off 23/06/94

Deliquent 01/06/02

Account Balance £0.00 Jan 2003

DCA took it over in Jan 2003

According to Database bumpf was sold to DCA in April 2003?

Interest rate changed to zero - 06/06/95

All my payments after that were classed as recovered against a zero balance right up until Jan 2003

 

Charge still on my house in name of Bank

Copy of agreement received on S.A.R - Wrong address and unsigned by anyone - looks like it was just typed up. Where it says "Property situated at and know as" has been left blank

The T's and C's is 1 page mostly talks about use of your information and market research. section 18 states in so far permitted by law you agree that the lender may at any time transfer, assign, charge or otherwise dispose of the loan and security for the loan and any benefits , interest or rights therin together with any securites or other property charge to or held by the lender in support thereof to any person or persons without giving you prior notice. - we already know that they did not sell it with the debt.

 

19) This agreement shall not be binding on the lender untill signed by or on it's behalf and shall be deemend to be made on the date on which it is signed.- The copy I have is not signed by anyone.

 

Where should I go from here?

Thanks

JP08

[JP08]

Forgot this bit

 

I am still wondering why emails and a letter of Authority were sent out early 2007 as well? when the account is closed and was sold on to the DCA in Jan 2003?

[surfaceagentx20]

My next move would be this:

 

Apply to the Land Registry for the cancellation of what ever entry is made againast your title on the property. I can't remember if you revealed the entry before. Can you repeat it or find out the precise wording on your title? Ideally, you will get up to date Office Copy Entries relating to your title from The Land Registry.

 

Once I know that, the requisite form for submission to the Land Registry can be prepared. The application may not result in cancellation, but for the cancellation to be avoided it will be necessary for the bank to explain its objections and in this way the bank will be forced to reveal its hand.

 

Knowing the bank's legal justification for the continuance of the charge will assist in figuring out whether there is some other means of challenging that justification.

 

x20

[JP08]

Hi x20

 

I have copied from page 2 of my thread for ease. This is on the copy I have now, I will try and get a more recent copy, but hopefully this is something to be going on with

 

The land Registry document that I have is dated 3rd March 2000, but it does not appear to have changed according to my solicitor

Proprietorship Register

Title Absolute

 

(4th September 1989) Restriction: Except under an order of the registrar no disposition by the Proprietor (s)of the land is to be registered without the consent of the Proprietor (s) of the charge dated 30 August 1989 in favour of HFC Bank PLC reffered to in the charges register

 

Page 2 C Charges Register

 

4) (4th September 1989) REGISTERED CHARGE dated 30th August 1989 to secure the moneys including the further advances therein mentioned

 

5) (4th September 1989) Proprietor (s) HFC Bank PLC (Co. Regn No XXXXXXXXXX)

of Mortgage centre PO Box 1523 Birmingham B1 3PU

 

I got this copy via my solicitors back then, I have not had to request a copy myself before, but I would imagine it will be on their website? I will try and get it ASAP

Thanks Again

JP08

[JP08]

Hi x20

 

I have managed to find my way to a form OC1 for a copy of the document that is admissable in court. I thought I might as well go for that one as it says downloads are not admissable in court. it can take up to 20 days apparently and is going to cost me £6 but I guess it will be worth it. My lunch hour has been used up trying to find it so I will send it off recorded delivery tomorrow. I will update again when I get it to see if it has changed any since 2000

 

Thanks

JP08