Property Debt Goes Wrong – Your Legal Exposure

Whilst property laws and the recovery of associates debt has its own Statute, the usual debt collection methods also come into play. Therefore, it’s important to get a bearing of where a case may go, dependent on the route the creditor chooses. For example, do they go all out for a Judgement or do they look at extended litigation.

Below we have listed the types of actions open to any lender, in the event of issues arising from a non-performing loan.

Each and every option open to a creditor is different as are everyone’s circumstances and the types of case. Typically shortfalls on a Buy to Let are more civilly dealt with against the scenario of a creditor seeking a Judgement say on a PG, then applying for an Order Charging Land on the home.

If there are more than one of the scenarios/action in place, then the issues can compound. You need to make sure you are ‘fighting the right fight’. For example some clients vent their fury at say a Fixed Charge Receiver when the final Demand will come from the lender, who should be the point of focus from the outset.

Below is a list of the types of actions taken by lenders and/or their agents and advisors to recover money owed:

1. 1. Fixed Charge Receiverships,
   2. Administrators,
   3. Liquidations,
   4. Repossession Proceedings,
   5. County Court Summons, culminating in
   6. County Court Judgements,
   7. Orders Charging Land,
   8. Statutory Demands, culminating in
   9. Bankruptcy Petitions,
   10. High Court Actions,
   11. High Court Recovery, and
   12. Appointment of Bailiffs.

The key to dealing with any litigation or legal is to act, immediately and get the best specific advice. By best specific advice we mean:

1. 1. Using advisors that work specifically in that area,
   2. Check their track record, and
   3. Ensure they are commercial in their appearance. This is so important.

Too often we see people using the ‘family’ lawyer who is good at conveyancing but not well versed in this form of potential litigation

Armed with that specific advice – be realistic and pragmatic. Because, if you are not and your judgement and decisions are jaundiced by any emotions, you will fail and the costs in defeat can be extortionate.

We at Bell & Company always say, ‘know the worst – achieve the best’.