If you follow the advice of this site then you should not complete an I&E form or make nany offers. Why have I read that there are so many instances of settlements being reached. What needs to be done in order to obtain a reasonable settlement figure. This whole issue is now getting to my wife and stressing my marriage. Any help would be greatly appreciated.

-- Tim Heath (tim@computerlogistix.freeserve.co.uk), January 07, 2001

Answers

In many cases, the shortfall amounts being claimed by the lenders is significantly higher than it ought to be. Most of the time, properties are being sold at way below their market value, the agents fees and other fees being charged during the sale of the property are also suspicious and in many cases inflated.

To obtain a reasonable settlement figure, the borrower needs to be sure that the house was sold at the best price possible, ie the market value, and that any other fees are fair.

Unfortunately, lenders are reluctant to release information on how they marketed the properties and provide invoices for other fees, prefering to engage solicitors to make threats of court action if the borrower doesn't play ball. This leads to a stalemate which many of us are in.

If once a shortfall figure is justified, then negotiations can start to reach a settlement. In some cases, where a lender runs the risk of being proved that they acted inproperly, they can be willing to cut the shortfall figure to a small amount which the borrower would be willing to pay.

Its all about making sure that what you're being asked for is properly justified, unfortunately its not that simple.

Hope this helps

Pendle

-- pendle (pendle@amun-ra.demon.co.uk), January 07, 2001.

That is helpful, but may question was really how you get to a negotiating situation. ie you don't complete an I&E, or make offers is it the BS that throws out a lower settlement figure or do I have to act against the advice of the site and start the negotiation process by making the initial offer.

-- Tim Heath (tim@computerlogistix.freeserve.co.uk), January 07, 2001.

Negotiations can only really start once the lender has justified their claim to you. In most cases, the shortfall sums being claimed are ridculously high and completely unjustified because the lender has sold the repossessed property for many thousands less than it was worth.

There is no point in you making an initial offer until you have forced the lender to justify their claim. Otherwise you will be paying the lender money they are not entitled to.

Only when you are satisfied that amount being claimed is justified, then you can start to negotiate paying in installments or maybe get it reduced even further by paying a small sum in full and final settlement.

-- pendle (pendle@amun-ra.demon.co.uk), January 07, 2001.

I understand that there are many people who have negotiated vastly reduced settlement figures (but like Pendle indicates, the original claims are so ridiculously high that anything seems 'reduced'!), and their success stories are on this site and/or linked to this site. But they didn't do it overnight. A lot of it seems to depend on the lender you're dealing with.

Personally, I think that settlements just encourage the lenders to carry on doing what they're doing.

In my opinion many people agree to pay settlements on unsubstantiated shortfall 'debts' because they just want the whole thing over and done with. This puts them automatically in a weaker negotiating position.

More often than not they have to borrow money to make a settlement.

*If* you are prepared to live with the situation for a while longer, you can probably come out of it a lot better off. OK, it's not fair, and you must want your life back, but the bottom line is that if offer up X amount of money then the likelihood is that they'll say, No we want X + Y. That's basic negotiating tactics. They don't care. They're not losing any sleep over it. It's not personal to them; and they think they have all the time in the world.

But they don't have all the time in the world.

For example, if you can demonstrate that the lender messed you about for months, even years, over the production of evidence of its claim (deed, MIG, valuations, receipts, etc) then that lender will effectively have stuffed its own case against you (see this site under Repossession - why lenders refuse to supply documents) under the new-ish Civil Procedure Rules.

And if, for example, you can demonstrate that the property was undervalued, or undersold, or poorly marketed, simply because it was known to be a repossessed property, then Skipton v Stott 2000 CA will apply, and the lender runs the very real risk of having its whole claim being thrown out of court, because of this legal precedent.

Good luck. I hope you get what you want, and I hope that you do indeed get your life back one way or the other.

-- Eleanor Scott (eleanor.scott@btinternet.com), January 10, 2001.

I think one of the key points that the site is making is that it isn't possible to negotiate with a lender in the traditional sense of negotation, that you come in with an offer and they come in with theirs and your offer goes up and their offer comes down until together you thrash out a compromise.

To do so wouldn't be in the lender's interest so it doesn't play the game that way.

I think some people find this genuinely hard to believe. I would recommend that people who *do* think they can sort it out with some sort of casbah-type haggling try ringing the lender and asking them what it would take to make the lender go away. You'll find that:

1. the lender is remarkably unwilling to knock anything off its claim.

2. part of traditional negotiation/haggling involves you making an offer, a small offer, but an offer nevertheless. But what you won't realise is that your offer was also you admitting to the debt and that the lender can point to this in court as your admission that you owe the original amount they claimed (Ouch!). So never admit to the debt and never do anything that could be construed as you admitting to the debt.

3. after months of pleading and agreeing to fill out the Income and Expenditure form the lender might drop to circa six to eight thousand pounds. If you play it well.

4. the whole experience is humiliating

5. you're broke, possibly for years.

6. you're borrowing money from your relatives to pay off the lender who you thought you could negotiate with.

So, this site advises people not to think that traditional negotiating is possible.

Proper negotiation really begins when you ask for the documents and proof as set out in the Repossession section of this site. This is because you are then asking the lender to prove the debt. That *is* negotiation. It is negotiation because you are then showing the lender that you are as capable of sticking to your ground as they are.

*If* they ever issue a summons and you *if* you don't think you have a case against them, you make a #2,000 offer of settlement (called a payment into court or Part 36 offer) in the period before the case is actually due to be heard. But see your lawyer first.

This is how commercial debt is "settled".

Lee

-- Lee (repossession@bigfoot.com), January 11, 2001.