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"Unenforcable" Credit Agreements - let's get it out in the open

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  • Ansu
    Ansu Posts: 67 Forumite
    druss wrote: »
    If you actually want the debt written off there is no other way of doing this except taking a lender to court so do not get scammed.


    As explained by fermi above though, just because an agreement is unenforceable it does not get written off. Most of the claims that surround s77/s78 are incorrect and different legislation is being confused.

    On the assumption that a claim did get as far as court, and was found to be unenforceable, it wouldn't always have much affect on the actual debt as in above post.
  • Marmaris08
    Marmaris08 Posts: 43 Forumite
    So let me get this straight.

    If a DCA cannot supply you with a copy of the original CCA or the CCA has errors on it, the debt then becomes unenforceable through the courts yes?

    What steps then can the DCA take to make you pay the loan.......none I would imagine? Is this correct?

    Please feel free to explain id I have got this wrong.
  • fermi
    fermi Posts: 40,542 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Rampant Recycler
    Marmaris08 wrote: »
    If a DCA cannot supply you with a copy of the original CCA or the CCA has errors on it, the debt then becomes unenforceable through the courts yes?

    What steps then can the DCA take to make you pay the loan.......none I would imagine? Is this correct?

    Please feel free to explain id I have got this wrong.

    Correct in theory for Consumer Credit Agreements made before April 6th 2007.

    Plenty of people on Debt-Free Wannabe have used this to get rid of an unreasonable DCA. :)
    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
  • petermb_2
    petermb_2 Posts: 1,565 Forumite
    I do not think you can take any single issue and treat it or deal with it in isolation. The entire business is far too complex.

    The only safe way of tackling such an issue is through a specialist lawyer but one that does not charge fees to the borrower. That is the only way that you can ensure that all bases are covered.
    I am a former Broker, former IFA and former compliance officer, for my sins.

    However, I have since seen the light.
  • orangetrader
    orangetrader Posts: 103 Forumite
    interesting comments but why reinvent the wheel when you can already get your loan or credit card checked for free anyway?
    http://forums.moneysavingexpert.com/showthread.html?p=19540523#post19540523
    Re DIY, I think that it leaves the question of how you force acceptance that the debt is unenforceable without damage to your credit rating and potentially high legal costs unanswered. Not impossible though and power to anybody that does it off their own back
  • fermi
    fermi Posts: 40,542 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Rampant Recycler
    petermb wrote: »
    I do not think you can take any single issue and treat it or deal with it in isolation. The entire business is far too complex.

    This thread is about just that. Did you not read the first post? :rotfl:
    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
  • druss
    druss Posts: 70 Forumite
    Ansu wrote: »
    As explained by fermi above though, just because an agreement is unenforceable it does not get written off. Most of the claims that surround s77/s78 are incorrect and different legislation is being confused.

    On the assumption that a claim did get as far as court, and was found to be unenforceable, it wouldn't always have much affect on the actual debt as in above post.


    By pushing the claim via a court process the lender will usually settle out of court and wipe the debt off, they know by going to court they would lose and do not want the additional cost.

    If you have bad credit and just want the lenders to stop hassling in theory you can do this yourself.

    However if you want your credit record to remain intact then this is not an option as the lenders will place a default on your credit file.

    Yes they have no right to do it and after a lot of time and hassle then you may be able to get a default removed.

    My advice would be keep paying until you have aknowledgment that the debt has been written off or a letter from the lender saying at the very least they wont enforce the agreement.

    I have had dealings with a firm that charge £395 upfront per agreement to cover the solicitors costs, but they also offer a FULL refund if you are not successful. Unlike some firms they do not charge a further fee on successfully writing off an agreement.

    They claims firm will still have paid the solicitors upfront to cover the work involved and they will swallow the loss on those cases where a refund is issued.

    My advice is:-

    Be careful - Find out what you are getting for your money

    are the firm

    a) Just getting a copy of the agreement.
    b) Obtaining an agreement and assess for unenforceability. (is this assesment by a solicitor or just a joeschmoe)
    c) Legally challenging from start to finish.


    Check for a refund if you dont succeed.
    I am a Mortgage Adviser .You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • fermi
    fermi Posts: 40,542 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Rampant Recycler
    Peter

    This thread was originally for discussing and posting the legalities behind these "claims".

    So please post up the legislation, regulations and criteria that you refer to that has not already been posted. :)
    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
  • petermb_2
    petermb_2 Posts: 1,565 Forumite
    druss wrote: »
    By pushing the claim via a court process the lender will usually settle out of court and wipe the debt off, they know by going to court they would lose and do not want the additinal cost.

    If you have bad credit and just want the lenders to stop hassling in theory you can do this yourself.

    However if you want your credit record to remain intact then this is not an option as the lenders will place a default on your credit file.

    Yes they have no right to do it and after a lot of time and hassle then you may be able to get a default removed.

    My advise would be keep paying until you have aknowledgment that the debt has been written off or a letter from the lender saying at the very least they wont enforce the agreement.

    I have had dealings with a firm that charge £395 upfront per agreement to cover the solicitors costs, but they also offer a FULL refund if you are not successful. Unlike some firms they do not charge a further fee on successfully writing off an agreement.

    They claims firm will still have paid the solicitors upfront to cover the work involved and they will swallow the loss on those cases where a refund is issued.

    My advice is:-

    Be careful - Find out what you are getting for your money

    are the firm

    a) Just getting a copy of the agreement.
    b) Obtaining an agreement and assess for unenforceability. (is this assesment by a solicitor or just a joeschmoe)
    c) Legally challenging from start to finish.


    Check for a refund if you dont succeed.

    There is only one company that will offer a totally free service including the legal assistance. No cost up front or deduction from the compensation.
    I am a former Broker, former IFA and former compliance officer, for my sins.

    However, I have since seen the light.
  • rog2
    rog2 Posts: 11,650 Forumite
    10,000 Posts Combo Breaker
    druss wrote: »
    However if you want your credit record to remain intact then this is not an option as the lenders will place a default on your credit file.

    Yes they have no right to do it and after a lot of time and hassle then you may be able to get a default removed.

    My advice would be keep paying until you have aknowledgment that the debt has been written off or a letter from the lender saying at the very least they wont enforce the agreement.

    If a creditor or dca fails to supply a true, compliant copy of the executed consumer credit agreement within 12 working days of receipt of the debtor's request, and £1.00 Statutory Fee (bit less than £300+) then, as already stated, they are in default and can no longer enforce the agreement without first seeking permission from the Courts.

    It is at this stage where the debtor can cease making payments.

    The debtor may also demand that any defaults, entered by the creditor/dca are removed from his/her crf.

    The debtor is now 'in the driving seat' and can, although most are usually content to let the matter rest at this point, demand that the creditor/dca repays any payments that the debtor has made against this alleged debt.

    Generally, though, the action that the debtor takes will depend on his/her initial reason for requesting the cca - it may be that there was some question over the amount already paid, or other terms within the agreement. Equally it may be that a dca has been demanding unfair payments and imposing 'unlawful' penalty charges.

    In these cases the debtor may well choose to make some form of payment in order to draw a line under the matter - this may include the options of 'making a full and final settlement offer' or offering to pay the balance at a rate that the debtor can afford, rather than at a rate that the dca/creditor imposes on the debtor.

    As I see it, the biggest 'problem' that these 'Loan write off' companies are creating is that they are 'selling' the cca request proceedure as a means of 'avoiding debt' whereas the whole concept of the Consumer Credit Act was to ensure that there was equal protection for both lender and debtor.

    Please do not misunderstand me - I have absolutely no sympathy whatsoever for any lender who, in a greed driven haste, lends money without first having ensured that the 'agreement' is fully compliant. After all, the Act has been around for 35 years now, so they have had plenty of time to get their own act together. I do, however, have every sympathy for any debtor who enters into an agreement which is not compliant - the onus is fairly and legally on the creditor to ensure that any consumer credit agreement is compliant.

    Therefore, in my opinion, if an agreement is found to be 'flawed' and, therefore, unenforceable through even a minor technicality, then the creditor should accept that decision. Perhaps any future agreements, made by that lender, will be compliant.

    So my advice to anyone who wishes to go down the cca request route is:
    • Examine your reasons for wishing to go down that route.
    • Be fully prepared for the fact that a creditor/dca may, indeed, be able to provide you with a true copy of the original executed consumer credit agreement and that the agreement will, then, be enforceable.
    • Use the Template letters that can be found on this forum or on National Debtline - www.nationaldebtline.co.uk/england_wales/factsheet.php?page=getting_a_copy_of_your_credit_agreement_and_account_details
    • Stick religiously to the 12 working day time scale.
    • Check any document provided against the terms outlined by fermi - or post it on the DFW board, to ensure its validity.
    • In the event of no, or non-compliant, cca being provided within the legally prescribed time-scale, cease payments to that creditor/dca.
    • Ignore any letter that states that they are requesting the cca from the original creditor and require an additional period of time - the clock starts ticking the moment they receive your request.
    • Ignore any letter that states that 'since we are not the original creditor, we are not obliged to provide you with this information' - the Act applies to whoever is chasing you for the money, whether they are the original lender or not.
    • Ignore any 'appeal to your moral obligations' towards the debt. It is your decision, now, as to what you wish to do about the 'debt'.
    • Do NOT go to a fee charging company - the statutory fee for a cca request is £1.00. Add on a few pounds for recorded delivery for letters - max £10.00. Then go to the DFW Board for all the support and guidance you need, for free.
    I am NOT, nor do I profess to be, a Qualified Debt Adviser. I have made MANY mistakes and have OFTEN been the unwitting victim of the the shamefull tactics of the Financial Industry.
    If any of my experiences, or the knowledge that I have gained from those experiences, can help anyone who finds themselves in similar circumstances, then my experiences have not been in vain.

    HMRC Bankruptcy Statistic - 26th October 2006 - 23rd April 2007 BCSC Member No. 7

    DFW Nerd # 166 PROUD TO BE DEALING WITH MY DEBTS
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