challenging a CCJ

steve811

For soem years I have been reducing our debts and have now got it down to a couple of "biggies" One of these is a long standing debt with Lloyds TSB. In 2002 I took out a loan with LTSB and also a credit card. I soon got into trouble and ran up an overdraft of £4000 and maxed out the credit card. At this point LTSB stopped paying the loan and the charges rocketed.

Foolishly I changed banks and stopped paying any money to LTSB. In 2006 they obtained CCJ's for two out standing accounts the credit card account (£3990) and the loan/current account which they lumped together.

The credit card account was handled by a seperate company and we have an agreed payment plan which is reducing the balance slowly but steadily.

A default notice I have from 2002 shows that the loan account stood at £5975 and a later on from 2006 says that the loan account had increased to £7790. Obviously they added interest after I stopped paying the account. However when they took me to court and obtained a CCJ they claimed for a total of £15659 plus interest making the total £16179!

LTSB have not made any attempt to negociate on this figure and in 2008 obtained restrictions on our property. I am now in a position where I can challenge the amount of the debt, as more than half of it was made up of interest!

My questions therefore are:

1) Should LTSB have continued to pile interest on after the deafult notice (we did ask them not to)?

2) Would a court agree that the debt is excessive and agree to set aside judgement until LTSB agree to a lower amount?

3) Beeing as we have not made a payment since 2006 what is the danger that LTSB could try to enforce the whole debt from now?

I must make it clear that I don't mind paying the debt, but for a debt of £9000 to rise to over £16000 simply because they added interest is not right!

Any advice would be gratefully received!:D

iolanthe07

I must make it clear that I don't mind paying the debt, but for a debt of £9000 to rise to over £16000 simply because they added interest is not right!


I expect the charges are in line with the terms and conditions you signed up to. They would argue that you broke the contract you had made with them. FWIW I would say: 1. Yes - they can do that. 2. They might. You could plead your case with the court and see what happens. 3. They probably have the right to do that, but it wouldn't be in their interests to ask for an unrealistic lump sum.

steve811

iolanthe07 wrote: »

I must make it clear that I don't mind paying the debt, but for a debt of £9000 to rise to over £16000 simply because they added interest is not right!


I expect the charges are in line with the terms and conditions you signed up to. They would argue that you broke the contract you had made with them. FWIW I would say: 1. Yes - they can do that. 2. They might. You could plead your case with the court and see what happens. 3. They probably have the right to do that, but it wouldn't be in their interests to ask for an unrealistic lump sum.

The original T&C's do state they can charge interest and charges, but I thought that when a default notice was issued all charges were frozen?

backinbusiness

up to the creditor I am afraid - some do, some don't

bib

Tixy

Yep there is nothing that states interest must be stopped after a default notice - seems to be a common misconception that they have to but they don't.

After a CCJ they can only add interest if it says they can in the judgement.

After a charging order is granted on a consumer credit debt I believe at that point they can no longer add interest.

Lloyds will almost certainly try to enforce the debt still - quite possible they may be content to just wait until you decide to sell your house.

PNPSUKNET

all not forgetting the stat 8% county court intrest that can be applied, they have you by the balls really

Tixy

After a charging order is granted I don't think the 8% interest can be applied for this type of debt.