Negative equity - hounded for 13 years

[MarianG]

13 years ago, due to ill health and an idle ex-husband who wouldn't work, I was forced to sell my house in London for half the original cost incurring £20,432 of negative equity. I moved to the West Country and have since been in rental accommodation and on a much lower income. However, Bradford & Bingley to whom I owe the debt have pursued me eversince (even, I think, stooping to the depths of phoning me at home saying they were from the Court vetting me for jury service and asking for my details, but on checking this out I discovered that this is not how jury service is determined and was advised that if I knew who it was that phoned me I should report them to the police as it was a criminal offence to impersonate a court official. I suspected it was them as the following week I received a letter stating that they knew where I worked, but unfortunately I could not prove anything.) I have submitted several income and expenditure forms and through their solicitor started to pay £10 per month until they wanted to increase the amount. I offered a £1000 one off payment which I was able to borrow, but this was rejected. The Citizens Advice Bureau did not prove to be of much help and only advised bankrupcy (a course of action I wish to avoid because of my job and the fact that my landlord would be told). I have now received two letters from a debt collection agency called Experto Credite and am not sure what to do. Should I ignore them and hope they either take me to court or write the debt off, or contact them and try and reach an agreement. Either way, I will be paying this debt off for the rest of my life as I will be taking my State Pension in three years' time. I have spoken to other people who found themselves in my situation in the early 1990s and their debts have been written off. I am also worried about them sending in bailiffs.

If anyone has any advice to offer or has been in the same position I would be glad to hear about it.

[Guest Lueeze]

Have you had any contact with them in the last 6 years?

 

Im assumin you have as you were paying a sum to them?

[MarianG]

Yes I have been dealing with their solicitors - unfortunately, otherwise I think it becomes statute barred after 6 years with no contact.

[Guest Lueeze]

Yes thats what route i was hoping for!

 

Im no expert at this sort of thing im afraid, can they not persue your ex too?

 

Try CCCS on 0800 138 1111. They have had good reviews on here!

 

Louise

[MarianG]

The house was in my name only and I was the only one working. Thanks for the telephone number. I will give it a ring on Monday.

[Guest Lueeze]

Yes dont be afraid, yes you may have this debt, but its not the end of the world.

 

We are here to support you!

 

Lou x

[MarianG]

Thanks. It's much appreciated.

[alanfromderby]

Just to clarify, the limitation period on mortgages is 12 years, not 6 years.

 

I am in a similar position, but don't want to go into too many details because I am just in a the middle of a game of cat and mouse with Experto Credite myself, and it is at a very critical stage. I would say however, that the people who phoned are nothing whatsoever to do with Bradford and Bingley, it was almost certainly EC.

 

I am ex-directory, but over a period of 10 months they have phoned two of my neighbours to get me to call them. The first time they told a lady who lives across the road that a "life assurance" company was trying to contact me about a matured policy. The person claimed to be from a tracing agency.

 

I called using 141 before the number, and the person said they would get the company to ring back. I said I would not give the number and to tell me the name of the company and I would ring them. It was then that I discovered it was actually EC.

 

After that I started to receive regular letters from them - they send about five different template letters out threatening different things.

 

Anyway, a few days ago my next door neighbour came round and said that someone had called him and asked if I still lived next door. He just told them to f*** off!

 

This company are **** - and will keep writing, and they will use underhand tactics.

 

One important question, were you ever taken to court over the shortfall?

[MarianG]

Thanks for your reply. No I have never been taken to court. I am not sure what to do about EC. Should I contact them? I'm going to call CCCS on Monday and ask for their advice and also have a word with a local solicitor who gives a free 15 minute appointment. I still can't understand why Bradford & Bingley took the matter out of the solicitors hands and put it with EC. I assume it's because they will probably be more aggressive!

[BotB]

Hi Marian,

 

Sorry to hear of your problems, these people really are parasites.

 

How long ago is it since you exchanged any correspondence or acknowledged the debt? Did B&B get a court order or did you hand the keys of the property back? Have they provided you with a breakdown of how, exactly, they have arrived at the figure they are claiming you owe?

If there's no court order, then the 12 year limitation period will keep restarting from when you last acknowledged the debt or made a payment. If they already have judgement, then there's no limitation period as such but they would have to get the Court's permission to enforce the Judgement after so long.

 

There's some very good info on the site I've linked below for people in your situation, which you might find helpful but I do have to say, it hasn't been updated for a while and may be out of date in some of its info. However, still a very useful source of information.

 

http://www.home-repo.org/

[alanfromderby]

I still can't understand why Bradford & Bingley took the matter out of the solicitors hands and put it with EC. I assume it's because they will probably be more aggressive!

 

Bradford & Bingley will have sold the debt to EC for probably 10 - 15% of the amount you owed. It will probably have been purchased along with many others at the same time.

 

You are right to seek advice on this, and I wish you the best of luck. Let us know how things develop.

[MarianG]

Thank you BotB for your reply. Unfortunately it's only a few months since I dealt with B&B's solicitor. There has been no court order and I didn't hand back the keys. I reluctantly sold the property myself when I was unable to meet the commitments, but at a huge loss. I originally had equity in it, but because of the recession, lost it all and ended up with negative equity, like many others. I will definitely check out the site you mention though. All suggestions are more than welcome to help me deal with this.

Thank you.

[BotB]

I sent you a pm with some info if you check your inbox

[andrew1]

They may have sold the debt as Alan implies but they ( the collection agency) should write to tell you this. Make sure you read all their paperwork thoroughly before taking them on - you may as well get it right from the start. Ask the agency if they now own the debt they will have to tell you and as Alan says the price they pay for it is about 10- 15% which gives you a much stronger negotiating position. They won't settle for 10 or 15% but anything over that is a bonus so take stock if that's the case and come back here for advice. However, if this has recently been with solicitors I would have thought it unlikely they have sold it quite yet. Anyway the advice above is good -don't worry - there's plent of support here.

[angry cat]

Hi MarionG

I am sincerely sorry to hear about your situation:(

 

I believe that you are not alone (if that is any consolation) the 1990's negative equity issue that was caused by the recession at that time.

 

There is a 'Limitation Rule/Statute relating to mortgages which is 6 years on the interest and 12 years on the capitol. This means that if the debt has not been refreshed or acknowledged then the mortgagee is Statute barred. However, in your case it looks as though the debt has been refreshed, but this area of law is incredibly complex!? Therefore I think that you should seek proper/correct legal advice, to ascertain your situation. I agree with Lueeze in that you should firstly contact CCCS or National Debtline

http://www.nationaldebtline.co.uk

either of these debt helplines should be able to put you in touch with a solicitor in your area or in London who has the specialist expertise to assist you, plus you may be in a situation to obtain Legal Funding or at least obtain help under the Legal Help Scheme.

 

There is however another issue that arises from you post, that is harassment from the collections agency and I would suggest that you contact your local Trading Standards making a 'formal complaint' about the collections agencies Bad/Poor debt collections methods. Trading standards are part of the Office of Fair Trading who have issued guidance on Debt Collection practices.

 

It is my opinion, that you should not write any more letters to either the mortgagee or the collection agency, until you have saught expert legal advice

 

Note, there has been protracted litigation culminating in a recent House of Lord's decision, West Bromwich Building Society - v - Wilkinson [2005] UKHL 44.

 

I do not have any legal expertise and am just simply a member of the Bank Action Group who is seeking justice and I do hope that my message to you, is helpful.

 

Kind regards

 

angry cat

[MarianG]

Thank you Andrew and Angry Cat for your replies. They are most helpful and I will certainly take your advice and contact the CCCS and National Debt Helpline and check my position out thoroughly before contacting EC. Your support is more than appreciated. Thank you.

[Eduin]

...they now own the debt they will have to tell you and as Alan says the price they pay for it is about 10- 15% which gives you a much stronger negotiating position. They won't settle for 10 or 15% but anything over that is a bonus so take stock if that's the case and come back here for advice. ...

 

Try 2 to 3%. Possibly less. And no they won't accept close to that because they need to cover the cost of purchasing the 95% that will never pay with the 5% that will. Basic maths will tell you that their profit position on individual debts is roughly 20 times the cost (assuming 5% will pay which is not unreasonable but *can* be optomistic) - i.e. 40% if they pay 2% to 60% if they pay 3%. Often bought debt on old accounts will change hands for fractions of 1% if it is old enough. Neg Equity is considered junk debt as there is little likelihood that a successful trace will result in finding a homeowner (the best way of actually get money out of a debtor is when they have an asset) as the repossessed seldom get back on the housing ladder.

 

Regards,

Eduin

[andrew1]

Eduin - do you know something I dont about these debt purchases? between 7 and 12% was the figure I was given and that was for the likes of Cabot buying old credit card debt. for the debt to be sold for so little it would have to be pretty old and well passed around the market place surely? I can't imagine MarianG's debt being that old from what she says. She'll get a flat refusal in those kind of figures. Still we learn something everytime someone comes into the forum with experiences and I'm still learning! Thanks.

[angry cat]

Hi MarionG

 

I have read the preceeding posts regarding a percentage settlement of your debt but...

 

I think that you need to tread very carefully !

because your debt actually relates to a Mortgage Shortfall and as you have not yet ascertained as to WHEN the debt was acknowledged or refreshed?

You should not have any contact with the collections agency or mortgagee, that is until you have saught Legal Advice and as stated prior-

National Debtline will assist you and put you in touch with a solicitor who specialises in this complex area.

 

Kind regards

 

angry cat

[Eduin]

Eduin - do you know something I dont about these debt purchases? between 7 and 12% was the figure I was given and that was for the likes of Cabot buying old credit card debt. for the debt to be sold for so little it would have to be pretty old and well passed around the market place surely? I can't imagine MarianG's debt being that old from what she says. She'll get a flat refusal in those kind of figures. Still we learn something everytime someone comes into the forum with experiences and I'm still learning! Thanks.

 

I'm a debt collector.

 

You're right about the age of the debt being relavent to the price paid but the age is only one of the factors in debt pricing. Basically once an account has defaulted, you begin the filtering process. The most likely to pay should always be picked up by the first stage of collections which will be (definately for a large financial enterprise like a bank or finance co) be internal.

 

By the time debt gets to the "Prime" stage (first placement with a collection agency) you are looking at an absolute maximum of 15% recovery (and this varies greatly with the business cycle of the economy) and of that 15% only a proportion will appear "immediately" much will be paid over time. Debt purchase companies need a margin, so they aren't going to pay more than they can collect for a batch of debt, they will also look for a decent return. Again any large financial company will always "place" Prime debt with a DCA (Debt Collection Agency) where the DCA gets a cut, its more profitable than selling at this stage.

 

At the Secondary stage where obviously the likelihood of getting payment has fallen again (well under 10% by now) a lot of the big banks will sell rather than do a secondary placement. The banks are smart, they know that Debt Collection is a competitive market, they'll farm out debt as "Prime" more than once in many cases and the DCA will lap it up because they don't have any power over their client. So even if it is classed as secondary for pricing chances are its already been to two DCAs, possibly an "internal DCA" (a department of the bank using an assumed name) and first pass internal recoveries (usually called "account correction" or "customer support" rather than collections).

 

The pricing is very complex. It will depend on the risk profile of the acceptance (credit score) of applicants to the debt product, the likelihood of the debtors still being solvent, having assets (like houses) along with the age. When you actually take all the factors into account - gone aways, untraceables, bankrupts, asset free, nowadays people using the Banking Code and Debt Management Companies as a shield, the payment rate is ridiculously low and it is very hard to actually enforce debt (I often wonder why anyone pays unsecured debt - ever).

 

As I said, for post-repossession formerly secured loans the status will be junk. Slightly better if it were mortgage debt than second secured loan debt but still not good given that the debtors have already most likely lost all assets and the only compulsion to pay is the "honour" of the debtor which these days is not very high. Fractions of 1% paid for the debt will not be uncommon.

 

Regards,

Eduin

[lookinforinfo]

Hi Marian -I cannot imagine having something like that hanging over me for that

long. You have my sympathies.

My suggestion may need help from the likes of Alan or BF, but I will start the ball rolling. In your original post, you mentioned a figure of £20 grand or thereabout.

I assume that included amongst that, would have been a fair amount of charges.

I know that at 13 years, they are classed as Statute barred, but the moderators

here seem to think maybe not. And by writing in asking for a breakdown of the

B/Soc's figure, and then claiming the charges back, should get the bailiffs off

your back for a while.

 

You may have had a Mortgage Indemnity Guarantee on your property. If you did,

did they reimburse any of the B/S losses?

Can you revert to your maiden name, move house and get lost [if you'll pardon the expression] if all else fails?

[still-learning]

Hi have you had any other contact re this with B & B?

 

Is it settled with an agreement or is it still ongoing?

 

Reason i ask, is I have a friend who is in a similar position.

 

Cheers

[MarianG]

This topic was closed on 10 March 2019.

If you have a problem which is similar to the issues raised in this topic, then please start a new thread and you will get help and support there.

If you would like to post up some information which is relevant to this particular topic then please flag the issue up to the site team and the thread will be reopened.

- Consumer Action Group