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Mortgage Shortfall Debt

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A regular talking point here is that a mortgagor cannot simply walk away from a property which is in negative equity. They are liable to be pursued by the lender for any shortfall by the lender.

There is a 12 year limitations period but a recent case has extended this where the debt is acknowledged during that 12 year period:

Bradford & Bingley plc v Ashcroft

So, because Ashcroft acknowledged the debt and made some partial payments, the clock was reset and B&B were able to pursue him for the mortgage shortfall after 16 years.

There is quite a wide scope of what counts as acknowledgement of the debt so I can see a lot of people being caught out by this.

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A regular talking point here is that a mortgagor cannot simply walk away from a property which is in negative equity. They are liable to be pursued by the lender for any shortfall by the lender.

There is a 12 year limitations period but a recent case has extended this where the debt is acknowledged during that 12 year period:

Bradford & Bingley plc v Ashcroft

So, because Ashcroft acknowledged the debt and made some partial payments, the clock was reset and B&B were able to pursue him for the mortgage shortfall after 16 years.

There is quite a wide scope of what counts as acknowledgement of the debt so I can see a lot of people being caught out by this.

This isn't new law. It has always been the case.

tim

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This isn't new law. It has always been the case.

tim

Correct. Its why you should always try and go bankrupt at the same time. Or at least consider it

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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