Post bankruptcy and secured loan

A question about : Post bankruptcy and secured loan

Hi.

Our business folded in 2010 and we were declared bankrupt in 2012 and later discharged. We heard recently that the OR no longer has any interest in our house as it is in ( slight) negative equity which was a huge relief. We went into voluntary bankruptcy through CAP and have always done everything by the book. As advised we paid our mortgage but referred all other creditors to the OR or CAP.

As the solicitor was in the process of changing the deeds back into our name we noticed a second charge from HSBC on the property. Assuming it was an oversight we contacted both HSBC and the OR. It now transpires that we still owe 16k from a secured business loan. We were totally unaware that secured debt was not included in BR. Ignorance is not an excuse but at no point did anyone mention this or tell us to keep paying this creditor. This loan was secured as part of the original business set up.

What do we do now? We have had no correspondence from HSBC in several years and we have made no payment. After going through the mill for several years could HSBC now try to repossess when the house prices rise.

Thanks

Best answers:

• Hi,
  My first thought is; Do NOTHING!
  They don't seem to be interested, and as it wasn't ACTUALLY secured (no equity) they may have chosen to write off the debt in your insolvency, which would allow a bad debt writing down allowance against their tax bill.
  A land based debt becomes statute barred 12 years after default. Contact now could start that clock ticking again. The MCOB rules have an agreement regarding 'contact' (which is entirely different from the stat barred legislation) which gives lenders 6 years for a land based debt in certain circumstances.
  I appreciate the not knowing is not the best place to be, but 'waking up' the debt could be far worse!
  DD
• Thanks for replying. Our solicitor did write to HSBC to ask them to remove the charge as we assumed it was an oversight. They simply replied saying 16k was owed secured by charge over the property and if there were any other queries just to contact them. Is that regarded as the clock ticking again? Could you explain if we fall under 6 years or 12 years legislation There is nothing showing on our credit file either. The loan started at 13k in October 2010 so there is obviously interest accruing - would that not make it still ' live' ? We have no problem trying to pay the debt - we just worry that once woken up as you say they could become very aggressive and start repossession. Then again they could come after us in several years when we owe more and there is equity in the house. Ideally a soft reasonable approach with a renegotiated figure would be best but my worry is once we are back in the system there is no going back.
  Thanks
• Hi,
  Yes, your solicitor has started the 12 year clock ticking again - if they didn't inform you of the statute barred rules for you to make a choice on contact then, in my view, they have been negligent. Accruing interest has no effect on the legislation.
  I would be very doubtful they would start possession proceedings as they would spend money and gain nothing (be out of pocket) as the first lender would get paid in full (well almost) and they would get nothing.
  No reason you can't make monthly payments if you wish and can afford to. The 6 year MCOB rule will never apply now as they have responded to your agent (solicitor), which is enough to satisfy their industry scheme.
  DD
• Thanks again . I understand the process a lot better now