Old debt and restriction on property

[Steve811]

Ok, I am hoping some of the clever people on here will be able to give me some guidance on this!

In 2000, I was starting a new job and with a lower salary for the first 2 years was struggling. My bank (Lloyds) offered me two things, a loan of £4000 and a credit card with a limit of £3000 and a "new" account with benefits. I signed up for all and the money went on various things until in late 2001 I was in debt to the tune of £8000, The bank piled on overdraft charges, late payment charges and any other charges they could think of until the debt reached £16000! Despite writing to them and requesting they freeze charges they carried on charging me until they eventually sent me a default letter for the each of the two debts, one for the credit card (now £4000) and one for the bank account and loan (now £16000). As we had no means to repay they went to court in 2006 and got CCJ's for the two. I started paying the credit card by monthly payments and that is nearly finished! I also managed a couple of payments to the DCA for the bigger debt but these stopped in 2006. However, despite having agreements in place for both debts, solicitors for Lloyds went to court in 2006 and obtained Restrictions on our property which are still on the property, thus turning an unsecured loan into a secured one. Although the credit card debt has not been settled I did managed to claim back PPI charges on it (£250) and it is now less than 6 months from being paid and we can have the restriction lifted.


My question really relates to the £16000 debt. I have not made a payment since 2007, and it is now over 8 years since the restriction was placed on file. I have tried through the Land Registry to have one of the restrictions (the CC one) lifted using the Interpretation Act time limit, but they take the view that it was a secured loan and therefore the time limit is 12 years (2018). When I wrote to them they had to contact the solicitors for Lloyds and ask for their input, and they refused. I am therefore asking a number of questions:

1) How likely is it that Lloyds will try and collect and add a further 8% interest on before 2018?
2) What do people think of the chances of having the debt set aside by explaining to the court that the debt is actually 2 debts (loan and overdraft) rolled into one and should not be?
3) If I apply for refund of charges/PPI will this wake the sleeping beast?
4) How likely is it that an application to a court to have the debt enforced can be successfully challenged, given the time scales?

Sorry if this is a long winded post but I am trying to put as much info in as I can!

[Never-In-Doubt]

Re: Old debt and restriction on property

I'll ask Julian to pop in as she sold up with a restriction.

See here --> http://forums.all-about-debt.co.uk/s...th-Restriction

If you need access request it in your userCp

[Steve811]

Re: Old debt and restriction on property

I'll ask Julian to pop in as she sold up with a restriction.

See here --> http://forums.all-about-debt.co.uk/s...th-Restriction

If you need access request it in your userCp

Thanks, but I don't intend selling! I just want to try and get rid of it!

[Never-In-Doubt]

Re: Old debt and restriction on property

Thanks, but I don't intend selling! I just want to try and get rid of it!

She's pretty clued up is what I mean

[julian]

Re: Old debt and restriction on property

Steve
Welcome to the site.
My situation was similar to yours on that although in employment, years of wage freezes did not provide a salary to cover my expenses. Living on 'jam tomorrow' does not cover basic expenses.

You state that you have a Restriction. I assume you have a debt in your name only but your house is registered in your name and your spouse's.

To answer you questions from my experience
1) How likely is it that Lloyds will try and collect and add a further 8% interest on before 2018?

They will probably send letters from time to time reminding you to pay, with some threats.

The Statute of Limitations does not cover CCJs, which you have. A CCJ is removed after 6 years from the register, but is not expunged. It can be chased forever, but the judge may not allow enforcement after a long delay. Get right judge on right day.

The 8% interest can only be charged if it is written on the court order you received at the time of the CCJ.

2) What do people think of the chances of having the debt set aside by explaining to the court that the debt is actually 2 debts (loan and overdraft) rolled into one and should not be?

ImprobAble. The bank can roll them up. You have waited too long to object to CCJ.

3) If I apply for refund of charges/PPI will this wake the sleeping beast?

Yep. They will knock any refund off debt. Try if you can afford to pay and settle lower debt. Otherwise keep low profile.

Debt is recorded on CCJ so you may struggle whilst also raising profile and admitting debt.

4) How likely is it that an application to a court to have the debt enforced can be successfully challenged, given the time scales?

Unlikely that they will apply. Likely that you will succeed in defending.
The placing of a Charging Order/Restriction allows the claimant to apply for an order for sale. However, even on £16000 debt, it is highly unlikely that it be granted. Some consider that a Charging Order is not enforcement unlike orders to pay by installments, attachment of earnings, etc. Note that they do threaten bankruptcy, and that would be defended with help from other sources on the forum.

As your spouse is a joint owner, for £16000 I don't think a judge would admit an application for an Order For Sale. The judge presiding at my case said I would never be forced to sell for such a small % of house value.

[Never-In-Doubt]

Re: Old debt and restriction on property

Thanks Julian - great answer. Thank you

[Steve811]

Re: Old debt and restriction on property

Steve
Welcome to the site.
My situation was similar to yours on that although in employment, years of wage freezes did not provide a salary to cover my expenses. Living on 'jam tomorrow' does not cover basic expenses.

You state that you have a Restriction. I assume you have a debt in your name only but your house is registered in your name and your spouse's. Yes that is correct.

To answer you questions from my experience
1) How likely is it that Lloyds will try and collect and add a further 8% interest on before 2018?

They will probably send letters from time to time reminding you to pay, with some threats. I have only had one letter from them in six years and that was from their "new" firm of solicitors advising me of a transfer of account , that was about 4 weeks ago, never had any threats or requests!

The Statute of Limitations does not cover CCJs, which you have. A CCJ is removed after 6 years from the register, but is not expunged. It can be chased forever, but the judge may not allow enforcement after a long delay. Get right judge on right day. Sorry but you need to look at the Interpretation Act, I have never seen any "Statute of Limitations" in English law, perhaps you are confusing the two? No debt over 6 years (12 if secured on a property) can be enforced if no the contract was founded on simple tort (S5,6 &7). I have yet to see any case overturning this principle, and regardless of a CCJ, a debtor has lost their chance after 6 or 12 years.

The 8% interest can only be charged if it is written on the court order you received at the time of the CCJ. Thanks, that's makes it even more unlikely that they are waiting to strike, as there is nothing on the CCJ.

2) What do people think of the chances of having the debt set aside by explaining to the court that the debt is actually 2 debts (loan and overdraft) rolled into one and should not be?

ImprobAble. The bank can roll them up. You have waited too long to object to CCJ.

3) If I apply for refund of charges/PPI will this wake the sleeping beast?

Yep. They will knock any refund off debt. Try if you can afford to pay and settle lower debt. Otherwise keep low profile.

Debt is recorded on CCJ so you may struggle whilst also raising profile and admitting debt. No CCJ's on any credit file and recent applications have been successful, although these were small (mobile phones).

4) How likely is it that an application to a court to have the debt enforced can be successfully challenged, given the time scales?

Unlikely that they will apply. Likely that you will succeed in defending.
The placing of a Charging Order/Restriction allows the claimant to apply for an order for sale. However, even on £16000 debt, it is highly unlikely that it be granted. Some consider that a Charging Order is not enforcement unlike orders to pay by installments, attachment of earnings, etc. Note that they do threaten bankruptcy, and that would be defended with help from other sources on the forum. We do agree on that one! We have over 100K in equity and the only reason I want to remove the restriction is if we want to move or raise capital for future expansion.

As your spouse is a joint owner, for £16000 I don't think a judge would admit an application for an Order For Sale. The judge presiding at my case said I would never be forced to sell for such a small % of house value.

Thanks for your input,

Steve.

[Never-In-Doubt]

Re: Old debt and restriction on property

Steve

Statute Barred occurs through The Limitation Act 1980 - linky --> http://www.legislation.gov.uk/ukpga/1980/58/contents

A Beneficiary has 6 years in order to pursue their debt. If they don't show adequate reason and it passes 6 years from last payment or WRITTEN acknowledgment then the beneficiary cannot pursue it through the courts. It is "Time Barred" - or simply Statute Barred. You need to read section 5 - to quote "An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued."

Now, when talking "sealed contracts" or secured debts, the beneficiary has upto 12 years. However unlike the above scenario where there was no CCJ - if you do have a CCJ then that makes it a "sealed contract" and thus you utilise case law which suggests the beneficiary has up to 6 years to pursue the CCJ or they'll have to go to court with a BLOODY good reason to try and enforce. Not many judges will allow this based on there being 6 years minimum waiting time.

A mortgage is similar however they currently (changing soon) allow 12 years to pursue and again, going back to the first example, it would become Statute Barred in line with s5 Limitation Act 1980 (but after 12 years, not 6).

I don't see the relevance to the "Interpretation Act (1978)"...?

Read as this as well -> http://www.hmrc.gov.uk/manuals/ihtmanual/ihtm28384.htm

[Steve811]

Re: Old debt and restriction on property

Steve

Statute Barred occurs through The Limitation Act 1980 - linky --> http://www.legislation.gov.uk/ukpga/1980/58/contents

A Beneficiary has 6 years in order to pursue their debt. If they don't show adequate reason and it passes 6 years from last payment or WRITTEN acknowledgment then the beneficiary cannot pursue it through the courts. It is "Time Barred" - or simply Statute Barred. You need to read section 5 - to quote "An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued."

Now, when talking "sealed contracts" or secured debts, the beneficiary has upto 12 years. However unlike the above scenario where there was no CCJ - if you do have a CCJ then that makes it a "sealed contract" and thus you utilise case law which suggests the beneficiary has up to 6 years to pursue the CCJ or they'll have to go to court with a BLOODY good reason to try and enforce. Not many judges will allow this based on there being 6 years minimum waiting time.

A mortgage is similar however they currently (changing soon) allow 12 years to pursue and again, going back to the first example, it would become Statute Barred in line with s5 Limitation Act 1980 (but after 12 years, not 6).

I don't see the relevance to the "Interpretation Act (1978)...?

Read as this as well -> http://www.hmrc.gov.uk/manuals/ihtmanual/ihtm28384.htm

Sorry, should have said the Limitations Act. All of the above is in line with what I understand now, so thanks for confirming that.

[Never-In-Doubt]

Re: Old debt and restriction on property

Yep that's the way it is mate so if you thought that - spot on

[Steve811]

Re: Old debt and restriction on property

Yep that's the way it is mate so if you thought that - spot on

Thanks, you allude to possible changes to the Limitations Act. Do you have any further info?

[julian]

Re: Old debt and restriction on property

Sorry to confuse. The Limitations Act (1980) is a statute ie written law, so after 5 tries at the response, I started to use shorthand, before the phone decided to do its own thing.

You will have lost the Notes on CCJs on the Register and on your credit files, but I do not know about the odds on removing the Restriction on your Land Registry entry. If the Land Registry advised you to wait 12 years, I would keep my profile as low as possible until absolutely sure the time has passed. If you don't need to have it removed immediately, why chance it.

Good luck.

[Steve811]

Re: Old debt and restriction on property

Your right, just would like to reclaim the PPI and charges which probably amount to several thousands!