Unenforceable Debt Confirmed - Query?

surfersparadise30

Hi. I have used a claims management company to see if 2 credit card debts were unenforceable. They have now confirmed (in writing) that they are, and advised me to stop making any further payments.

Can anyone offer any advice on this please?

I have been using both credit cards until Tuesday of this week. The letters arrived on Wednesday.

Is the recent spending also included or should I contact the lenders and offer to repay the debt since I applied to check if they were unenforceable?

In everyone's experience do you get marked on your credit score for non payment and if so, how easy is this to remove. I am a single parent with a mortgage and concerned that I may now have limited my options when I need to review my fixed rate in 2011.

Many thanks for your advice and opinions.

podperson

Basically by saying the debts are unenforceable they will have requested a credit agreement from the card companies and either not received one or found it to be invalid.
This doesn't mean that the card companies will just forget about the debt. They will still chase you for money, they will still pass to debt collection agencies if you don't pay them, and they will default you for not paying - which will affect your credit record.
The only thing this means that if the credit card company took you to court they would find it difficult to prove the debt was enforceable. What you need to do if you are going to stop paying them for this is to send them a letter (or perhaps the claim company will do it) saying that you don't believe the debt is enforceable, won't be making anymore payments and will be putting the account in dispute. You then won't be able to use the cards anymore.
If you are in a position to be able to pay off the debts then having them being unenforceable can put you in a better position to bargin for a lower full and final settlement.
To be honest these claim companies make this out to be a magic cure-all which it most definately isn't. If you're struggling with debt, can't afford to pay anything to them and already have a bad credit rating then I suppose it can be an option but since it sounds like you have been making payments and have an ok credit rating I would think carefully about whether it will be worth the repecussions for you.

Tixy

If you decided to stop paying then you will definitely be given a default on your credit file. This will stay on for 6years, you won't be able to get it removed and will seriously affect your credit rating and your ability to get any new credit/mortgage that you want for the next 6years.

Remember these debts are not written off, they will continue to exist, they just cannot be enforced in court (assuming the claims company are correct).

Personally if I were you I would not take the word of a claims company and would check for yourself as to whether they are enforceable. Some of these companies have been known to make mistakes and if they have then the creditor might still successfully take you to court.

In the experience of people on this board people usually only consider going down this route if they have already defaulted and stopped using the cards.
I really wouldn't know how it would be viewed that you have been spending on them when you suspected they were unenforceable and were hoping not to have to repay the debt.

DarkConvict

I can't agree more with the advice already posted.

An unenforceable debt is like it been statute barred, it cannot be enforced in court via CCJ/Decree, but you still legally owe the money.

However, unlike statute barred debts, they can continue to ask for payment, they can mark your credit file (so your credit worthiness for 6 years will be shot, this can cause interest rates to rise on other debts so cost you more money), and if you happen to sign a new credit agreement with them even if by accident the debt will become enforceable.

Unless your in serious debt troubles and already have a damaged history, deciding to stop paying is a decision you will regret.

Furthermore as Tixy points out, the claims company that overcharged you won't care if they got it wrong and the debt is enforceable, because you can't exactly sue them for you not paying debts that you owe. They are not independent financial advisors after all.

surfersparadise30

Thanks everyone. I wish I had done more research before going ahead with the claim. I am trying to contact them to see where I stand with getting my fee back, as they didn't inform me to stop using my card, or to change my bank account, which is with one of the lenders. Typically, it is a Friday evening and I will probably have to wait until Monday to speak to someone.

moonrakerz

surfersparadise30 wrote: »

Hi. I have used a claims management company to see if 2 credit card debts were unenforceable. They have now confirmed (in writing) that they are, and advised me to stop making any further payments.............................I have been using both credit cards until Tuesday of this week.

............and people complain about the way the banks behave !!

PNPSUKNET

they have done what you paid them to look at, so not sure a fee will be refunded

Tixy

I doubt very much they will give you a refund. At a guess the fee was to see if the loan was legally enforceable in court. Not to advise you on your use of the account. These type of firms are very good at getting fees out of people and I would be surprised if they have left their agreements open to any comeback from customers.

As I guess you now realise, if you do stop payments and have an account with the same bank they will continue to take the money that you owe on the card from any money in the current account.

DarkConvict

The fee for doing a CCA request is just £1, then spending 10 mins looking over it. https://forums.moneysavingexpert.com/discussion/2532927 (Part 3 has flowcharts)

That is all they do. There is no refund available, and if you value your credit rating and want to avoid incurring further charges i advise you keep on paying your accounts.

BigCraigJohn

Dont stress about it. Probably wasted a few quid but youve lost nothing.
Get the agreement scanned and get it on here.
If you click Never-In-Doubts homepage in contact info as he/she is not posting on here anymore, you'll then get any individual guidance you may need.
http://forums.moneysavingexpert.com/member.html?u=672511
However as has been said only look at unenforceability as a last resort(short of bankruptcy) as it will make a mess of your credit report ie default which will stay for 6 years.