Time Barred when?

[JonCris]

The statute of limitations clock starts running on the date of last activity on your account. Typically this is the date you last made payment, but it can also be the date you last made payment, a promise to pay, entered a payment agreement, or even acknowledged liability for the debt. Generally, you can check your credit report for the last date of activity to figure out when the statute of limitations clock started.

Amongst mortgage lenders, there used to be considerable confusion as to how long they have to sue for the shortfall. It was commonly thought that a mortgage, usually being by Deed, once the property is sold leaving a shortfall debt (cause of action) the lender had a further twelve years within which to claim the outstanding balance.

In two important cases, the courts have now confirmed that this is not the case: Bristol & West plc v Bartlett 2002 EWCA Civ 1181 and West Bromwich Building Society v Wilkinson 2005 1 WLR 2303.

Mortgage lenders have twelve years to sue for the outstanding principal under s20(1) Limitation Act 1980 and six years to sue for outstanding interest under s20(5). Time begins to run on the date to which the right to receive the money accrued and the fact that the property had sold and the mortgage discharged does not disapply s20.

In practice, time begins to run from the date of the last payment (bearing in mind that any part or full payment starts time running afresh).

 

The Society argued that it had commenced proceedings just inside the twelve years from the date of sale. The House of Lords held that the claim was out of time, and it should have commenced within twelve years of the date of the last payment.

 

Furthermore, if the borrower enters into communication with the lender in which, as a matter of constructions, he acknowledges the debt, he then extends the time for the lender to sue. Therefore importantly ALL communication should be in writing and must be marked “Without Prejudice”. Bradford & Bingley plc v Rashid 2006 1WLR.

 

Important note: Any payment made by, say, the Benefits Agency, even if not expressly authorised by the borrower, revives the right for the lender to sue from the date of said payment. Bradford & Bingley plc v Cutler 2008 EWCA Civ 74.

Edited July 22, 2010 by JonCris

[dx100uk]

dont understand this bit:

 

Important note: Any payment made by, say, the Benefits Agency, even if not expressly authorised by the borrower, revives the right for the lender to sue from the date of said payment. Bradford & Bingley plc v Cutler 2008 EWCA Civ 74.

 

dx

[JonCris]

dont understand this bit:

 

Important note: Any payment made by, say, the Benefits Agency, even if not expressly authorised by the borrower, revives the right for the lender to sue from the date of said payment. Bradford & Bingley plc v Cutler 2008 EWCA Civ 74.

 

dx

 

If the debtor is on benefits & the agency makes a (mortgage) payment even in part BEFORE the 6 year limit then the time starts running again

[BankFodder]

I think that it might be more correct to say that time runs from the date a payment fell due and was not paid.

 

For instance, if the rule really wa that time ran frm the date the last payment was made, then imagine that you took an approved payment holiday of, say, one year - and then didn't make any more payments at all. I am quite sure that your 6 years, or 12 years wouldn't start running from the date of the payment prior to the payment holiday.

 

I think that time runs from the date upon which a creditor becomes entitled to sue for the debt - meaning the date that a due payment was not made.

 

The expiry of the limitation period confers a kind of adverse posession over the debt and so the non-payment of an installment must be contrary to the rights of the creditor.

 

I suppose that acknowledging the debt is equivalent to acknowledging the rights of the creditor.

 

I'm afraid that I disagree about the effectiveness of using without prejudice.

WP merely protects from disclosure to a court the details of attempts to negotiate a settlement. However, with leave of the court, the contents of WP communications can be heard by the court if they in some way are germane to the issue to be tried - and not merely the basis of settlement.

 

WP might be effective but I think that it would be much safer to include a statement that the correspondence is being entered into without any admission of liability and without any admission of the debt.

 

Probably best to head the letter "Without prejudice and without any acknowledgment of liability"

[UnitedFront]

I agree BankFodder and I rely, also, upon the Judgment of Wilkinson:

 

Lord Scott of Foscote at para 29:

It follows that, in my opinion, the mortgage money outstanding became due and payable by Mr and Mrs Wilkinson one month after they had made default in paying a monthly instalment. For the purposes of the Limitation Act 1980, whether section 8 (an action on a specialty) or section 20 (an action to recover a principal sum secured by a mortgage) time, therefore, had begun to run well before 9 October 1989 when the society took possession of the house with a view to its sale. It follows, also, that the building society's claim in this action, which was commenced on 12 November 2002, is statute-barred.

 

We've been having this debate in another thread also, if you were interested in that:

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/268907-when-debt-statute-barred-2.html#post3048134

 

As far as my understanding goes from the wording of the Limitation Act and the relevant precedent cases, it goes as follows:

 

--> Initial cause of action (missing a payment) begins the clock ticking.

--> If no further payments or acknowledgements are made, then the above would be the relevant date for the purposes of the Limitation Act.

--> If further payment or acknowledgement is made after the initial cause of action occurred, then the date of this payment and/or acknowledgement would now constitute the relevant date for the purposes of the Limitation Act.

 

 

Cheers

UF

[JonCris]

I'll say it again 'In practice' limitation runs from the last payment the reasoin being that date of payment is a provable fact its also more likely to stop the creditor from either inventing a later date or withholding indefinitely from issuing of a default thereby extending limitation.

 

Remember we are talking SIX YEARS not months but years & if a creditor hasn't sort to resolve matters long before limitation kicks in then they don't deserve to win.

 

Also as litigation years after the event may mean the debtors has no evidence/agreement & if the creditor refuses or is unable to supply it etc then the debtor could argue Laches

[UnitedFront]

JonCris, I've found the source of your posts, which are copied pretty much word for word. I've emailed the editor of that source, who is on the face of it a very well educated person. For all intents and purposes, he appears to agree with me:

 

Thank you for your message. I will review the entries on the pages you refer

to shortly, but the essential point is, as you identify, that on the facts

of those cases, time (last) started running afresh from the date of last

payment being an acknowledgement and part payment for the purposes of

sections 29-31 Limitation Act 1980. However, it is in each case a question

of fact as to when, for the purposes of section 20 Limitation Act 1980, the

right to receive the money actually accrued.

 

The above is the response I've received. Fact is that the assumption that in practice the date always is that of the last payment is irreconcilable with the Judgment that is the active precedent. It is a matter of fact based on a case by case basis, which is what I've been trying to get across.

 

Cheers

UF

[UnitedFront]

Furthermore could you explain exactly how a Judgment could be obtained in the situation that the claimant is unable to substantiate any claim with relevant paperwork? If that paperwork does not exist, then the claimant would fail at the first hurdle in court, so long as the defendant argued their case.

 

Assuming that the claimant did have the relevant paperwork to be successful, then the defendant would be entitled to a copy of all of this before any court hearing, under the Civil Procedure Rules, in order to form their defence effectively.

 

Cheers

UF

[UnitedFront]

Also, you are STILL taking the assumption that the defendant defaulting on the account and the claimant issuing a default are the same thing - they are not!! When their Lordships spoke of the defendant defaulting, they were talking of them missing payments.

 

The defendant defaulting on payments and the creditor issuing a default are two entirely different things!!

 

The date on which the defendant defaulted on a payment is easily ascertained as the dates would be a part of any contract and so it is a provable fact.

 

The claimant withholding issuing a default has absolutely no bearing on matters and would not, in any way shape or form, extend the limitation period. This is clear from the wording of the Wilkinson judgment; the time runs from when the right to receive the moneys accrued which they clearly identified as being when the defendant missed payments.

 

UF

[libjoyce7]

If I wanted to complain about my mortgage lender regarding something they put on my mortgage offer stating that I had past and present financial difficulties when I didn't back in 2007 is this too late now?to take them to court?

[sequenci]

If I wanted to complain about my mortgage lender regarding something they put on my mortgage offer stating that I had past and present financial difficulties when I didn't back in 2007 is this too late now?to take them to court?

 

Hello there. Please consider starting your own thread as you're likely to get much more help.

 

Best wishes,

 

Seq.