loan taken out before April 07 you may be entitled to have the balance cleared

petermb_2

It really depends on why it is deemed unenforceable. Even this is no longer cut and dried as many issues are at the descression of the courts now where they did not used to be prior to recent law changes.

The precedence is that should a consumer credit agreement be deemed unenforceable then the lender loses the right to recoup the capital and interest and the borrower keeps any goods secured on the loan. The truth is that the only way this is going to happen is if the lender lost in a court action.

AS it is the lender may be forced to admit the loan is unenforceable but will attemprt to bully the borrower into continue payine by threatening CCJs and stuff.

This will work for a while until the courts catch on that they are probably letting illegal agreements through their courts on a daily basis.

The likely outcome is that the borrower will stop paying and a "passive" settlement is agreed. This is a term that one bigger lender has used for some time. In other words, they keep what they have had off you so far and you walk away owing them nothing.

Such outcomes usually result in the lender not agreeing with your arguments but make a grand gesture of good will.

The last such case I was involved with the lender let the borrower of £22000 and gave his deeds back, having already collected £30,000 on a £13,000 loan. The borrower should hav turned down the offer but accepted.

So to answer your question, there is no hard and fast answer. Apologies.