Threatening Letter from Ruthbridge - please could I have some advice??

[rl27]

Hi all

 

Firstly this site is a god send. I really need some advise please.

 

My ex partner and I had our house repossesed in April 1999. It was sold at auction and there was a shortfall of around £14k in total (which would have been covered by the MIG).

 

I thought rather naively that I would hear no more about it. Me and my ex split and they appear to be chasing me for a debt of £14k which has gone to this Ruthbridge company. The letter I have receved today is threatening bankruptcy proceedings. I have since got myself out of the financial myre and bought another house in 2005. I am really worried I could lose this house and this is the kids home. the letter has been sent on a "without prejudice" basis which I think means it can't be mentioned in court - is this correct?

 

Please advise whatI should do as the debt is almost 10 years old and I don't have that sort of money. I also worry that all the hard work I have done trying to get back onthe credit ladder will all be undone and I will lose mine and the kids home

[PGH7447]

Bump

[rl27]

Bump??

[fiftypence]

If a debt is more than 6 years old and it hasn't been acknowledged during the last 6 years and no payments have been made in the last 6 years then it is statute barred. If this is the case then send letter M to them (from here http://www.consumeractiongroup.co.uk/forum/general-debt-issues/20758-creditors-dcas-letter-templates.html) and when they respond come back here with their response and get further advice.

[Lula]

i thought it was 12 with mortgage debts, but i dont know which category this would fall under

[GuidoT]

Notwithstanding the limitations point, the MIG should have covered any shortfall, but this usually benefits the lender only.

 

It maybe the MIG was inadequate and the £14K is that balance that the MIG did not provide cover for.

 

I am going to look a bit further into the matter.

 

If you have not done so already see if you can track the original MIG paperwork that explains what it covers.

 

I think you know this, but essentially you paid a sum akin to an insurance premium, to cover any shortfall in the event the property does not cover the mortgage on repossession.

 

Without prejudice means, as you say, it should not be disclosed before the court, it is usually used when making offers to settle. It is however frequently used incorrectly.

 

Ruthbridge maybe just trying it on.

Edited September 29, 2008 by GuidoT

[pt2537]

as subscribers to the CML code, the code does require that they do not pursue claims for shortfalls on mortgages after a period of 6 years,

 

now the CML code is voluntary only so they will argue that they can chose to ignore it

 

however , cue the Consumer Protection from Unfair Trading Regulations 2008 which make it an unfair practice to breach a voluntary code as far as i know

[GuidoT]

Looks like the MIG does not benefit you at all.

 

I see that the insurer can pursue you when required to pay out. Your lender can even take legal action on behalf of the insurer.

 

It is not very fair (but when dealing with banks I expect nothing less) you pay for the insurance and do not stand to benefit from it.

 

Looks like twelve years too, even though it maybe six if the lender is a member of the CML and or the insurer a member of the ABI.

 

I gleamed this from here, it contains other information that maybe relevant to you too.

[rl27]

Hi all - thanks for the information given on the various posts. Should I just ignore these letters then? I don't want to call them and other posts have advised not to contact DCA in these sort of instances. Should I send the letter that says after 6 years the CML advise that the debt should be written off?

[weller711]

Taken from NationalDebtLine, hope it helps, good luck x

 

HOW LONG CAN I BE PURSUED FOR THE DEBT?

 

The legal position under the Limitation Act

 

There has been a lot of confusion about how long the lender has to pursue you for a mortgage shortfall under the Limitation Act 1980. This has now been clarified by the court of appeal in the cases of Bartlett v Bristol & West plc, Paragon v Banks and Halifax v Grant. The court decided that the limitation period for mortgage lenders trying to recover mortgage shortfall debts is 12 years under Section 20 of the Limitation Act 1980.

INFORMATION

Capital

The lender has 12 years from either:

• the last time a payment was made on the account; or
  
• the last time you acknowledged that that you owe the debt;
  

to start action to recover the capital owed on the mortgage.

INFORMATION

Interest

It appears the lender has six years to start action to recover any interest that has been added to the debt.

Acknowledgement and payment

 

There are two ways for the 12 year time period to start running:

• the 12 year time period starts running from the last time the lender contacted you and you agreed in writing that you owed the money. This is known as 'acknowledgement'; or
  
• the 12 year time period starts running from the last date you or someone else, e.g. who owned the house jointly with you, made a payment to the lender.
  

The Financial Services Authority rules

 

From 31 October 2004 the Financial Services Authority (FSA) has taken over the regulation of mortgage lending and problems with existing mortgages.

The Mortgage: Conduct of Business Rules say that a lender "must deal fairly with any customer who has a mortgage shortfall debt". If the lender decides to take action to recover the shortfall they must make sure you are told about this in writing, within six years of the date of sale of the house. If the lender does not do this, you can complain to the Financial Ombudsman Service.

INFORMATION

Contact details for The Financial Ombudsman are listed under the 'Useful addresses' section at the end of this fact sheet.

Council of Mortgage Lenders policy

 

The Council of Mortgage Lenders (CML) has a policy on the collection of mortgage shortfalls which should be followed by their members as a point of good practice.

From 11 February 2000 the CML says anyone whose property was repossessed and sold and who has not been contacted by their lender within six years from the date of sale will not be asked to pay the shortfall.

WARNING

The lender may argue that if they can prove they tried to contact you that this counts as 'contact', even if you did not receive the letter.

Under the CML policy, if your lender contacted you before 11 February 2000 then it appears that they can continue to try to recover the shortfall even if your house was repossessed and sold more than six years ago. If this applies to you then you could try arguing that it is unfair for the lender to keep trying to recover the money if your house was sold over six years ago.

Point out that they have limited the recovery period for new cases and have a 'commitment to fair and sympathetic treatment for people for whom possession cannot be avoided'.

What should I do?

 

Work out when you last paid or acknowledged the debt and when the house was sold. If this was over 12 years ago you can use sample letter M5 and argue that the debt is unenforceable under the Limitation Act 1980.

Check if your mortgage lender is a member of the CML.

If they did not contact you before 11 February 2000 and it is six years or more since the house was sold without any contact from your lender, you can argue the CML policy with your lender. Use sample letter M4.

Has your lender sent you a letter within six years of the sale confirming that there is a mortgage shortfall and that they intend to recover the debt?

If you did not receive this letter you may be able to complain to the Financial Ombudsman Service. Ask your lender for a copy of their complaints policy and follow this first.

ADVICE

Options for dealing with a mortgage shortfall are complicated. You may need to contact us to discuss which option may apply to you in your situation. Phone us for advice.

Phone us for advice 0808 808 4000

 

 

JOINTLY OWED DEBTS

 

If your mortgage was in joint names, you need to check what the other borrower has done. If they acknowledge the debt it doesn't affect you but if they have made a payment the limitation period starts running again for both of you from the date the last payment was made.

Phone us for advice 0808 808 4000

 

 

ASK FOR DETAILS OF THE THE DEBT

 

If you are contacted by your lender or their agent, the first thing to do is to ask for a detailed breakdown of how they have worked out the amount they say you owe.

This should allow you to check all the figures and give you a basis for deciding if the correct procedures have been followed.

WARNING

You should be very careful when you write to your lender as you don't want to acknowledge the debt at this stage. If this happens, you will start time running again and you will not be able to argue that the lender is out of time to pursue you for the debt. If you have not heard from your lender for nearly twelve years, then, phone us for advice before contacting your lender. You should ask for details of:

• the exact sale price of the house;
  
• details of any valuations made on the property;
  
• how they have calculated the interest that has been added on up to the time of the sale and since the sale; and
  
• any solicitors', estate agents' fees or court costs that have been added on.
  

INFORMATION

You can use sample letter M1, at the end of this fact sheet, when writing for a breakdown of the amount claimed.

Phone us for advice 0808 808 4000

 

 

WHAT IF MY LENDER DOES NOT REPLY?

 

If your lender is being awkward about supplying a breakdown of the mortgage shortfall account to you, then you should write to the lender and request they send you all the information held by them on computer to do with the mortgage account. This request should be made under the Data Protection Acts 1984 and 1998 and refer to the 'right of subject access' under the acts.

The lender can charge you up to £10 for supplying the information. They can also write back to you requesting you to be more specific or ask you for more information. You should be sent anything held on computer but not paper or microfiche files (the Data Protection Act 1998 also covers paper and microfiche files but this will only apply to information held from 1998).

If the lender does not comply with the request you should complain to the Information Commissioner who will take it up with the lender and can serve an enforcement notice if the information is not sent.

INFORMATION

Contact details for the Information Commissioner are listed under the 'Useful addresses' section at the end of this fact sheet.

Phone us for advice 0808 808 4000

 

 

MORTGAGE INDEMNITY INSURANCE

 

You also need to check whether you had a mortgage indemnity guarantee (MIG) on the house. This is an insurance that covers the mortgage lender against a loss. You would usually have paid it out as a lump sum when you first bought the house, or it could have been deducted from your mortgage advance at the time.

You need to check that your mortgage lender has made a claim on any insurance available. This could limit the amount you owe to the mortgage lender although the insurance company can ask you to pay back the amount they pay out to the mortgage lender.

The insurance company sometimes asks the lender to collect their share for them. From 31 October 2004 your lender must inform you in writing if your mortgage shortfall debt may be pursued by another company.

Some people argue that the indemnity policy should cover the borrower for any shortfall as they paid for the insurance in the first place. This is a complicated area of law.

Following a case called Woolwich v Brown 1995 the court of appeal has decided that generally mortgage indemnity insurance only covers the lender and not the borrower. We suggest you phone us if you want more advice about this.

Phone us for advice 0808 808 4000

[weller711]

Subscribing

[rl27]

Weller thank you so much for that. It's has been really useful - I a just owrried as the lender appears to have passed to a DCA ages ago and the first letter I had relating to this was last week. I am just wondering whether anything to do with the CML still stands when they have sold the debt on?

[weller711]

I would imagine that it would still apply but...cannot be 100% sure so I would either wait until some clever person on here to come along and give you their wisdom or you could call the NationalDebtLine ~ its a free number ~ 0808 808 4000, not sure what time it is open to though.

 

Glad it helped, will keep an eye on this thread.

 

Edit:Link to Nationdebtline ~ National Debtline England & Wales, for FREE CONFIDENTIAL and INDEPENDENT ADVICE call 0808 808 4000

[fiftypence]

Interesting stuff that Weller711, good find.

 

Just as a side comment isn't Mortgage indemnity insurance a total con? The borrower pays for the cover and the protection goes to the lender, and both the lender and insurer appear to be able to reclaim any repossession shortfall from the borrower anyway - has to be probably the biggest undetected financial [problem] of all time! Wonder what the insurers did with all those fat premiums when the property market was bullish - hhmm... directors bonuses? Makes DCA's look like amateurs.

[weller711]

It is a total con, I agree but at one time most mortgages, in the majority sub prime mortgages would only be offered if this was included. But like you say, where did it all go when it strongly appears not to have helped the mortagee in any way shape or form. Beggers belief

 

I truly believe that you CANNOT trust any finanical organaistaion anymore but what are people to do, the law certainly doesnt seem to protect the majority of people, hence why the rules around CCA's are so important to many of us as , as far as I am aware, its our only chance of fighting back.

 

If it wasnt for forums like CAG I would imagine that there would be serious implications for people in debt, who in the most, for no fault of their own, are unable to repay their debts in the normal way. How many sucicides relating to debt and repossession do we not know about, how many families have fallen apart and see no way forward. i would be very interested in seeing the exact figures.

 

Though not a long term, regular user of CAG, it has certainly helped me no end in dealing with the barstewards who call themselves DCA's, at a time when my husband was seriously ill. CAG helped me to fight back and I only wish people in dire situations could find these forums in time, which are for many, like myself, a lifeline.

 

I'll stop ranting now and be away to my bed.

[caro]

Have you acknowledged the shortfall at all in the last nine years? If not, then frankly I would suggest that you just ignore it. The fact that it's marked Without Prejudice implies they know they are chancing their arm. Don't let them intimidate you. IF they take you to court, then you can start to deal with it, but unless that happens it isn't a problem. Even then your house is safe unless they can persuade the court to put a charge on the property so they can get the money when you eventually sell your house.

 

Let's cross that bridge when we come to it - if we come to it.

[fiftypence]

It is a total con, I agree but at one time most mortgages, in the majority sub prime mortgages would only be offered if this was included. But like you say, where did it all go when it strongly appears not to have helped the mortagee in any way shape or form. Beggers belief

 

Ah yes, sub prime mortgages, hit those hardest who can least afford it. And where would the market be without the sub prime market too? GREED GREED GREED! Some bank CEO's should serve time for the mess this has caused, but do you think that will happen:evil:

[rl27]

Thanks Caro and Weller - I can't tell you how much better I feel already just talking and sharing with such nice and helpful people.

 

I will speak to the national debtline when they open and agree with Caro the fact they have done it on WP basis does indicate they are probably trying it on.

 

How do I make a donation? I can't afford much but I would like to give soemthing to help and say thanks and hopefully it will helps other like me

[GuidoT]

Your pledge is appreciated, it has been very dry on the donation front lately.

 

Please donate something to CAG if we have helped you.

[rl27]

Hi All

 

Please note I have received another letter from Ruthbridge today. It states the following

 

WITHOUT PREJUDICE

Further to previous correspondence regarding the above, you are hereby given notice that bankruptcy proceedings are due to commence for recovery of the outstanding balance together with costs and interest.

We are no longer prepared to correspond with you regarding this matter as we will be advising our client no later than "next weeks date" to issue a petition for your bankruptcy, with a view to the sieizure of your assets/property as the discretion of the court appointed trustee.

You should also note that the above debt of £15k is a principle sum which will increase should the intere which has been frozen for the last 24 be applied.

However as a final opportunity to avoid legal proceedings we are prepared to accept a lump sum payment of £10k (!!!) which must be received in our offces by "next weeks date". this sum would be accpeted as full and final settlement against your liability and will also ensure you are not pursued for the remainder of our clients claim in the future.

As an added inentive once this sum has been received and cleared our client will instruct the credit ref agencies to mark thedebt as satisfied.

Please note your remittance should be paid to Ruthbridge with reference number 99999999 quoted on the reverse. Alternatively you can make payments using credit or debit cards by calling the above number.

 

 

Please could you advise what I should do? As it is on a WP basis again I agree with Caro that they may be chancing it? But I am also concerned that someone could turn up at the door with bankruptcy papers?? should I send the letter where I ask them to provide all documentation to prove the debt is mine and hope they can't do it which en renders the debt in dispute??

I tried to call National Debtline but unsurprisingly it was engaged each time I called

 

Many thanks for your help - I am worried sick

[Lula]

again, ignore it, should they EVER chance their arm and try and issue you with anything, then we can sort it. But you need to remember, during this credit crunch there are slim pickings for the DCA's too, gone are the days where a threatening letter would guarantee them an income, we are starting to know our rights and if we dont know, we come somewhere where we do, the very fact that the letter is WP means that they wouldnt want it shown in court cos they would get severelly chastened by the judge for persuing in such an agressive manner, a SB'ed debt. You need to complain to TS (their local one) about all this.

[rl27]

Thanks Lula - I had visions of some shaven haired, burly blokes turning up on my door issuing me with court papers. I will ignore it however if anything else trainspires or any other latter come in the next few days, please could I revert back for some advise of what to do next?

 

Many thanks for all your support everyone x

[Lula]

You need to report them to their local trading standards but there are more expert people than me here than can advise you further, my thoughts on all this really are not printable, it would give CAGBOT an aneurism

[rl27]

Thanks Lula - will send a letter - is there a template letter available or am I best to draft something up personally?

[42man]

Make copies of all correspondence they have sent you......with a small covering letter. and send it to the OFT, TS, and the FOS....