Unpaid mortgage

14
Found 15th May
hi all, can someone help me out here, this is not for me just for the record but for someone who is really asking for my help. basically a house was bought about 13 years ago. they didn't have the money to pay the mortgage so it got repossessed, they still have no money to Thier name nor do they own anything that's in Thier name. yet the debt company keep in writing to them asking for the payment, now they are threatening with court action. it's been 10 years since they been chasing and it's really worrying them now. does anyone know how to get the debt collectors off Thier backs. the debt is approx 30k. thank you very much in advance
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If the house was repossessed by the mortgage company it would be sold (probably at auction) and the money received, less fees, would be offset against the outstanding mortgage debt, The problems occur when the money in does not pay off the debt. If the original mortgage, for example, was 100k and the house was sold for 80k (inc selling/legal costs) the difference between the two, 20k, is still owed by the borrower. If the original mortgage was in joint names then both borrowers are liable for the full amount (not 10k each), so if one pays 10k thinking they've paid their half of the debt they're sadly mistaken.The lender will also add interest onto the debt.
The CAB will be able to go into this in more detail but sometimes the only, and best, option is to go bankrupt wipe out all debts including the mortgage.
14 Comments
When a house gets repossessed I think you lose all your money that you've paid the band along with the house. But there should be no outstanding debt on the house. Just a bad credit record.

You sure the debt is for the house?

Maybe ask your friend to query with the mortgage company he took the mortgage out with.

And tell them to make an appointment with the citizens advice bureau. ASAP.
Would suggest CAB. I assume the house was sold for less than value of the outstanding mortgage so in theory they still owe it.
As the debt is old I thought it might have been statute barred and therefore not repayable but it looks like mortgage debt is enforceable for longer, 12 years as opposed to 6 for other debt, loans credit cards etc. so it’s important to find out exactly how long it’s been since any payments were made.

stepchange.org/deb…spx
Edited by: "Skaman" 15th May
EN1GMA32 m ago

When a house gets repossessed I think you lose all your money that you've …When a house gets repossessed I think you lose all your money that you've paid the band along with the house. But there should be no outstanding debt on the house. Just a bad credit record.You sure the debt is for the house?Maybe ask your friend to query with the mortgage company he took the mortgage out with.And tell them to make an appointment with the citizens advice bureau. ASAP.


If there's a shortfall, you're still liable.
If the house was repossessed by the mortgage company it would be sold (probably at auction) and the money received, less fees, would be offset against the outstanding mortgage debt, The problems occur when the money in does not pay off the debt. If the original mortgage, for example, was 100k and the house was sold for 80k (inc selling/legal costs) the difference between the two, 20k, is still owed by the borrower. If the original mortgage was in joint names then both borrowers are liable for the full amount (not 10k each), so if one pays 10k thinking they've paid their half of the debt they're sadly mistaken.The lender will also add interest onto the debt.
The CAB will be able to go into this in more detail but sometimes the only, and best, option is to go bankrupt wipe out all debts including the mortgage.
Looking on National debt line, looks like the lender can pursue your friend for an infinite time as long as the lender has told/advised your friend, within 5 years of the date the home was sold, the shortfall debt amount.
There is a free template on there for your friend to dispute the outstanding debt, which may be of some help.
Also, as a reminder, if the mortgage was in joint names then both parties are jointly and severally liable, just wondering if the lender is pursuing the other party who may be able to pay the outstanding shortfall
Edited by: "Toptrumpet" 15th May
My old man owed money to HMRC and they pursued him beyond the grave to get it. Which they did!
airbus3309 m ago

My old man owed money to HMRC and they pursued him beyond the grave to get …My old man owed money to HMRC and they pursued him beyond the grave to get it. Which they did!


Same here. He left me a few grand and I had to pay out of that leaving me with £400
I would suggest your friend seeks advice and look at options such as an IVA or bankruptcy, the irony is that had they done this years ago they would have been debt free/almost debt free by now!
cmdr_elito12 m ago

I would suggest your friend seeks advice and look at options such as an …I would suggest your friend seeks advice and look at options such as an IVA or bankruptcy, the irony is that had they done this years ago they would have been debt free/almost debt free by now!


Yeah. Always confront debt and deal with it not avoid it. It just makes things worse
Thanks for the informative posts guys. Another reason why I love hukd, and especially certain posters. Very knowledgeable.
Thank you very much everyone that's some brilliant advices there. I think the best route will be bankruptcy. They missed out on the first 5 years of not telling them. It has been 10 years.
Do you know when the lender first advised your friend ofthe shortfall? was it within 5 years of the date the property was sold?
Yes unfortunately about 1 and half years after
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