Hi(posted 7877 days ago)There are 2 issues here: the '6 year rule' - which is really the Council of Mortgage Lenders voluntary agreement, and the provisions of the Limitation Act 1980.
1. CML agreement: this voluntary agreement applies from 11.2.02 and states that if the borrower is not contacted by the lender within 6 years of the repo'd house being sold, then s/he will not be pursued for the debt. If you were in correspondence with the lender between 1996 and 2002 there will have been 'contact' and the CML agreement will therefore not apply.
2. The LA '80: it is now the case that a lender has 12 years to sue a borrower for a shortfall debt. The 12 years starts to run from the date the lender could first have taken possession proceedings (this depends on the terms of the mortgage, but is usually after 2 or 3 missed payment).
However, the 12 years is re-started whenever a part payment is made or a signed, written acknowledgment given by the borrower to the lender.
Your correspondence with the lender, if you ALWAYS denied liability for their claim, will NOT have amounted to an acknowledgment and will NOT have kicked-off another 12 years. However, it does look as if the lender has up to another 5 years (1995-2007) to sue for the debt (depends on date of initial default or other acknowledgment or part payment) if it cannot be negotiated satisfactorily.
A CAB will help you negotiate a 'full and final' settlement.
Good luck and all the best
Guy