For the past 11 years, C&G have been chasing me for a shortfall , which i have been ignoring, due to advivce from most in the know. Now I have received a letter from them saying that someone will visit my home whether I like it or not! Where do I stand here? Do I be afraid to answer my own door? (i am already worried to answer the phone incase it's them, having somehow found my ex-directory no from somewhere)What if I do answer the door to them? What do I say? Are they allowed to do this? I am getting really on edge in my own home where I live with my hubby and 3 very young children. When will this ever end? I am becoming rather ill over the whole matter. CAN SOMEONE PLEASE HELP ME?

-- annette challis (robert@challis.fsbusiness.co.uk), May 10, 2000

Answers

No one can come into your home without your permission or a search warrant. You don't have to tell them anything, & you must certainly not admit the debt in any way, especially when you're so close to the 12 year limit.

Indeed, if you've been 'chased' for a shortfall for the past 11 years, you should consult a solicitor to find out whether C&G are out of time to claim against you: they have a maximum of 12 years to pursue you, which some people say is measured not from the date of repossession or sale of the property, but from when you last made a payment on your mortgage or 'acknowledged the debt'. (The terms of most mortgages state that the full amount of the mortgage becomes due if you break any of the terms of mortgage, such as make a late payment, & the 12 years is measured from 'when the debt became due').

There's often a year or more in time between when you gave up paying & when your house is finally sold after repossession. So you might be worrying about nothing - indeed, it sounds like C&G have got more to worry about than you do. Hang in there!...

Mark

-- Mark (markNZX@aol.com), May 11, 2000.

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Headnote 100044201 - Mortgages - Banking and Financial Services - Limitation - Sale of mortgaged properties by mortgagee in possession - Mortgagor claimed that sales were at undervalue and that mortgagee had wrongly paid proceeds to another chargee - Whether undervalue claim statute- barred - Limitation Act 1980 ss 2, 8, 36 - Raja v Lloyds TSB Bank plc - Chancery Division - Mr M Tugendhat QC (sitting as a Deputy High Court Judge) - 19.04.00

FACTS

The claimant, R, owned four properties charged to the defendant bank and subject to further charges. In 1987 the bank demanded repayment of facilities granted to R and when R failed to pay obtained possession orders in respect of the properties. Three of the properties were sold in 1989, 1990 and 1991. R issued proceedings in 1997 on the basis that the proceeds of sale should have discharged his indebtedness leaving a surplus. Further the sales were at undervalues. The bank's case was that it had credited R with the proceeds of sale to the extent to which its charges had priority and that R remained substantially indebted to the bank. That indebtedness was the subject of a counterclaim. The master struck out the statement of claim and R appealed.

ISSUES

(1) Whether the claim for damages arising out of the alleged sale at an undervalue was statute-barred.

(2) Whether the bank misapplied the proceeds of sale by paying the subsequent chargee.

HELD (dismissing the appeal)

(1) A mortgage by deed was a specialty under s 8 of the Limitation Act 1980 but the duty on a mortgagee to obtain a proper price did not arise under the deeds of charge but in equity (Downsview Nominees Ltd v First City Corp Ltd [1993] AC 295, Medforth v Blake [1999] 3 WLR 922; NLC 299059007). The period of limitation was not therefore 12 years under s 8. The claim for damages for breach of the duty in equity corresponded with the remedy for breach of a duty of care in tort. The court would therefore apply the six year limitation period in tort under s 2 by analogy under s 36 of the 1980 Act (Coulthard v Disco Mix Club Ltd [1999] 2 All ER 457; NLC 299033503 and Companhia de Seguros Imperio v Heath (REBX) Ltd [1999] 1 All ER (Comm) 750; NLC 299035601 followed). Accordingly the undervalue claim was statute- barred.

(2) There was no authority for the proposition that a mortgagee was bound to recover all that he was owed out of the proceeds of sale before paying them over to the encumbrancer next in order, or that he owed a duty not to disadvantage the mortgagor. Section 105 of the Law of Property Act 1925 created a trust over the proceeds of sale but did not oblige a mortgagee to exhaust his remedies against the proceeds of sale.

Stephen Barbour, Barrister

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Copyright Croner.CCH Group Ltd trading as CCH.New Law

-- (alison23@excite.co.uk), May 12, 2000.

Great - but what does it mean?????!!

-- Eleanor Scott (eleanor.scott@btinternet.com), July 13, 2000.

Having been contacted for a debt left to me by my ex-husband in 1991/2 (only learning of it in 1998) which was with the C+G, a solitor informed me to ingore call's, letters or forward them to him. If they turn-up on the doorstep refuse entry, do not get drawn into discussion and again, if you have one refer to a solicitior. Beware some of them are very motherly looking!!! It is frightening but they have no right in yr home.

-- Claire Niblett (niblettblue@totalise.co.uk), October 09, 2000.

I must agree with Eleanor on this, WHAT DOES it mean ? JJ.

-- jacky jones (jackycolin.jones@virgin.net), October 09, 2000.