secured loan debt

[tiger33]

hi,my house is going to be repossed 0n the 30th of this month,there will be enough money to cover the mortage company but not enough to cover a secured loan,i know that a mortage shortfall can be chased for 12 years,the question is does the secured loan become an unsecured loan after the house as been repossed and can the shortfall be chased for 12yrs or is it like any other debt and becomes statue barred after 6 yrs.thanks

[postggj]

Was The Secured Loan Below 25k

[Ell-enn]

Hi again Tiger, I remember your case from last year - what's happened in between then and now?

 

Is this the 1st plus secured loan ? how much was it for?

[tiger33]

hi ellen,work picked up but its got to be above 3 degrees so i,ve not worked since 14th of dec last year,so i had plenty of time on my hands to think things over and decided to throw the towel in because i would be paying 1st plus £1200 per month for the secured loan and my mortage company £600 per month on a house thats only worth £110000 and interest rates are at the lowest the,ve ever been and all 1st plus do is put there rates up so i,am paying 12% at the moment,so when the bank of england do start upping the interest rates i dread to think what 1st plus will do,also I do earn good money when i,am working but for the past 3 years i,ve been paying it all out to keep the house,so we,ve gone without holidays and days out and its not fair on the kids,so i,am going to rent a place for £550 and where going to start living again.

 

yes it is a 1st plus loan and it was for £75000

[Ell-enn]

You're doing the right thing Tiger, quality of life, especially when you have kids is very important:)

 

Unfortunately, 1st plus will chase you for the shortfall

[Killerschick]

When the property has been sold the shortfall debt will no longer be secured and as such can be incorporated in a bankruptcy.

 

Dependant on your other circumstances (do you have substantial assets which you might be forced to sell?, do you have large disposable income? do you have other creditors? would your employment be affected? etc) it may be worth considering bankruptcy as your credit rating will be adversely affected by the repossession anyway. It would take away the worry of having the shortfall debt hanging over you for a potential 12 years.

 

The time limit for collection of debts resulting from contracts formed by a deed (most loans secured on property fall into this category) is 12 years rather than the 6 under other contracts. The council of mortgage lenders have a code which says they will not start collection after 6 years if no attempt has been made to contact the borrower in the first 6 years after repo. However, they include attempts to contact rather than confirmed contact or acknowledgement so if they write to you, even if you do not respond they will still cite this in order to use the full 12 year limitation period.

 

Hope this helps