Retail surgery: I have recently received a letter from a different lender than the bank we agreed our loan with, stating that now I owe them money. How can that be?

You should always check that this kind of approach is not from a fraudster, but it can be the case that your debt has been sold on. Whether you are still liable for the debt depends on how it is handled.

Michael Green, partner at law firm Weightmans, says: “This is permitted in law, providing that certain conditions are fulfilled: the assignment must be absolute; it must be in writing and under the hand of the assignor (the original party that owned the debt); and written notice of the assignment must be given to you, the debtor. If any of these conditions are not complied with, the debt would not be enforceable in law.”

This is happening more as major banks look to reduce their loan books, and the situation is not as worrying as it may first appear.

Green adds: “Your rights remain unaffected against the new company. You should retain all your original contractual rights and the terms of the loan must remain perfectly intact. Providing you maintain payments and do not fall into breach, you should not notice any real difference to the original contractual position.”

If you are still not happy with the new arrangement, Green says that the only alternative you really have is to try to seek a refinancing deal. “You could always look for refinance and seek funding from a new lender to pay out the assignee. Whether this would be financially viable is another matter,” he concludes.