Debt Questions forum. General questions on debt issues.

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Byneo866
#3705 i was left with a £14.000.00 debt when my father died (from a joint morgage) but have not paid anything for the past 3 years because i'm on incapacity benefit.

Somebody told me that the debt can be wiped out if no money is paid for a certain amount of years, is this true? and if so how long?

any help would be great!
ByDavidc
#3706
neo866 wrote:i was left with a £14.000.00 debt when my father died (from a joint morgage) but have not paid anything for the past 3 years because i'm on incapacity benefit.

Somebody told me that the debt can be wiped out if no money is paid for a certain amount of years, is this true? and if so how long?

any help would be great!


I am sorry to be the bearer of bad news but you have been misinformed.
As the morgage was joint the debt simply passed to you and also as clearly your father had an estate, at least the equity in the house that we know about, it was the responsability of the executor to realise the assetts and settle any outstanding debts this would have included sorting out the morgage. I take it you now own the house in your sole name. I can not see how you can not have paid anything for 3 years as if that was correct the morgage holder would have repossesed the house by now.....You need to check with your morgage holder to check out exactly what the situation is.
David
Byneo866
#3709 Sorry.... i didn't explain myself very well, The house was taken back by the morgage company and sold for a crazy amount leaving the debt.

they didn't get much joy from my dad as he was very ill and as i said passed away.
It was then they contacted me asking for the money but i have just moved and i'm not sure what to do.

I've been told that if you pay nothing for some years then the debt is wiped but if i pay even a small amount that cannot happen.

Confused!!
User avatar
ByJaneClack
#3713 It all depends on when the property was repossessed.

Basically for the interest part of the mortgage the creditor has 6 years in which to take legal action to prove the debt. If you have not acknowledged or made any payment to the debt in the last 6 years (i.e. if your father hadn't either!) then that part of the debt would be statute barred. (That doesn't mean the debt has gone but rather that there is no legal means to get it back).

However for the capital that is still outstanding (and when the house was sold the proceeds would have gone to the interest part first) the creditors have 12 years before you can claim it is statute barred. One of the positive things here is that the Council of Mortgage Lenders have a voluntary code that says all the debt must be claimed in 6 years so they tend to stick to that.

It is also true to say that they tend to go for legal action just before the 6 years expire today just to make sure the debt is on record!

However you are on benefits and you might therefore care to take advantage of the insolvency legislation that came in last year. Basically if you were to go bankrupt now it would wipe out all of your debt, as you are on benefits you would have no income payments arrangement to meet and you would be debt free immediately. Have a look at http://www.insolvency.gov.uk

Hope that is helpful.
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