Repossession and 2nd Charge shortfall

[SarahJ68]

In 2004 I got into the position where I fell behind with my mortgage payments. Stupidly I tried to borrow my way out of it and got a secured loan to make up the arrears. Over the next 2 years I struggled to pay both the mortgage and loan and this put me in a deeper hole and I ended up defaulting on both. In October 2006 we vacated the property, did it up as best we could on a limited budget so it was in as good a condition as possible to sell and it was repossessed in early November.

 

The property was sold in January 2007 for a slightly low but probably fair price and the mortgage was cleared in its entirety but the secured loan was only partially paid off.

 

I ended up moving around - staying with friends etc. until recently when I managed to get enough money together to rent somewhere so I'd not had any corresondence from the secured loan company until last week. They are now demanding repayment of the shortfall (around £7000) which I'm obviously not in the position to repay in full.

 

Should I write acknowledging the debt and make an offer to repay something each month? If so, how much are they likely to accept? I know I was stupid agreeing to the loan in the first place but I'm starting to put my life back together now and I don't want to get into the situation where I have to pay them so much I start falling into arrears with my rent or other creditors, etc.

 

Any help or advice gratefully received!

 

Thank you!

 

Sarah

[sillygirl1]

There really isn't much they can do other than make you bankrupt now - so don't offer them anything - they had the second chrge and the probably had a PPI and other payments you can claim against.

 

Ignoring them is probably not too bad an idea - if you haven't got any assets there is little they can do.

[tonycee]

Hi Sarah J.

 

First, stop beating yourself up.

 

We all make mistakes.

 

My question to you is,

 

do you want to pay this debt off, or have the debt collectors giving you grief for years to come.

 

Im sure you can come to an agreement with your creditor, one that you can afford to pay each month.

[tiglet]

Ignoring them will probably stress you too much and it is unlikely they will go away. Plus, this sight does not condone debt avoidance - it seeks to empower them to deal with tehir debts and ensure others deal fairly with them.

 

It is unlikely (although not impossible) that they would go for bankrupcy as you have no property. It may well be worth sending them an income/expenditure form to show them realistically what you can afford to repay each month.

[tonycee]

I wouldnt send them anything at this stage.

 

YOU call the shots until told differently.

 

Their letters are designed to be both threatening, and intimidating.

You have plenty of time at this stage, although you need to decide what you want to do.

 

As Sillygirl suggests, there are probably lots £££££ of charges that have been applied to these accounts, and could be used as a bargaining tool towards a F+F settlement offer.

 

Do you know if you paid PPI ?

[tiglet]

I agree that there may well be charges - a SAR would clarify this.

[Bona]

Sed off a S.A.R. it will be quiet reveeling and you may find that what you owe is not so much dont let them bro beat you , we are all hear for you so take heart all is not lost

[tiglet]

Well said Bona - you can take control of this.

 

Seeing if there is any PPI/unlawful charges may reduce the debt substantially and then you can discuss the matter with them (in writing, I would suggest) on your own terms.

[SarahJ68]

Thanks for all your advice. I'll send them a SAR. Is the standard SAR letter in the templates library ok or do I need anything special?

 

I'm not sure if I paid for PPI - I need to dig out all the paperwork which got chucked in a box somewhere when I moved out. I guess the SAR will tell me.

 

I'll send off the SAR on Friday when I get paid.