Unenforceable loan agreements

ALIBOBSY

mightymouse wrote: »

Hi

My comments were about legality, if the Contract is void or voidable then there is no basis on which the money was borrowed therefore it has to be returned.

It is well established that what fails in Contract is usually dealt with in Equity.

Do you think the Lender will just walk away?

In the house of lords judgement for Wilson vs sec for trade and industry, although the judgement states it is not fair to the lender, it is made quite clear that without a correctly executed agreement the debt is written off. So there is some legal precedent for debtors to argue this point in court(there are other cases as well), however people taking this route need to accept that the debtor will likely keep asking for the money and/or sell it on to DCA after DCA to pursue it, and may decide it is worth a punt in court especially if it is a relatively large debt.
ali x

ALIBOBSY

Sorry peter treading on your toes so will bow out and leave the arguement to you and MM.
ali x

mightymouse

Hi Peter

We have had this conversation before Mighty Mouse

Its probable we will have this conversation again!

jamesd

mightymouse, the Lords' decision was clear: there is a public interest in strictly holding lenders to their obligation to provide proper agreements and having them lose their money as the cost of not doing so is something that Parliament is entitled to do

The purpose is not to be fair to individual lenders or individual borrowers. It's to punish those lenders who are caught breaking the law sufficiently that all lenders will be more inclined to follow the law and provide proper agreements. That's because there has been a long history of illegitimate lenders mistreating borrowers and public interest was determined to be best served by trying to eliminate unscrupulous lending.

If you haven't read the decision I recommend that you do so, for it covers the issues thoroughly.

The discussions here are doing their part in fulfilling that policy objective, by increasing the chance that lenders who do not follow the law will suffer the penalty set out in the law for their failure.

petermb_2

ALIBOBSY wrote: »

Sorry peter treading on your toes so will bow out and leave the arguement to you and MM.
ali x

Hi

No problem. You are not treading on my toes. Quite the contrary.

A post script to the conversation is that lenders will be "invited" to enter full and final settlement agreements as part of any settlement and will therefore be unable to hand the case over to a third party hassle company.

rmg1

I appear to have unwittingly opened a serious "can of worms" here.
That was not my intention. I have recently had a bad experience with one of my creditors who are virtually refusing to help after I got into financial difficulty and wondered how best to "put a spanner in the works".

If I can do that, then more power to the little man, and I agree that there are moral issues, but the bank does not seem to agree with me.

Can anyone point me in the right direction for checking the legality of the contract before I make any more decisions, and hopefully to avoid outright war on this forum!!!

mightymouse

Hi

Is it possible to change my mind on the issue of unenforceable agreements (regulated).

I think Peter you are more right than I am and the decision is quite clear so thanks to all but I will try and bow out gracefully.

The appeal was heard in November 2000, shortly after the Human Rights Act 1998 came into force. The Court of Appeal, comprising Sir Andrew Morritt V-C, and Chadwick and Rix LJJ, allowed Mrs Wilson's appeal: see [2001] QB 407. Sir Andrew Morritt V-C recognised there was considerable force in First County Trust's submissions in support of the judge's view. But having analysed the statutory provisions, the court held that the £250 added to the loan to enable Mrs Wilson to pay the document fee was not 'credit' for the purposes of the Consumer Credit Act. So one of the prescribed terms was not correctly stated. In consequence the agreement was unenforceable. So also was the security. First County Trust was ordered to repay the amount of £6,900 Mrs Wilson had paid the company after Judge Hull's judgment together with interest amounting to £662. The overall result was that Mrs Wilson was entitled to keep the amount of her loan, pay no interest and recover her car.

petermb_2

I think you did that for yourself with your own research Mighty Mouse but it is a man who admits he is incorrect.

teeni

rmg1 wrote: »

I appear to have unwittingly opened a serious "can of worms" here.
That was not my intention. I have recently had a bad experience with one of my creditors who are virtually refusing to help after I got into financial difficulty and wondered how best to "put a spanner in the works".

If I can do that, then more power to the little man, and I agree that there are moral issues, but the bank does not seem to agree with me.

Can anyone point me in the right direction for checking the legality of the contract before I make any more decisions, and hopefully to avoid outright war on this forum!!!

Take your contract to your local cab or if you are entitled to legal aid to a debt specialist, they will check the contract for you, whether it is enforcable or not will depend on the small print type things that may not be obvious to most people, for the record I assisted a client last year who was havong their home repossessed by a lender who had secured a loan on the property which they fell into arrears with due to having to give up work because of a diagnosis of terminal cancer.

The contract was clearly invalid as it did not contain the necessary info and the courts returned the property to my client cancelling the debt completely because of said contract errors.

If you seriously believe there is an issue get it checked out.

Good luck
Teenie

petermb_2

rmg1 wrote: »

I appear to have unwittingly opened a serious "can of worms" here.
That was not my intention. I have recently had a bad experience with one of my creditors who are virtually refusing to help after I got into financial difficulty and wondered how best to "put a spanner in the works".

If I can do that, then more power to the little man, and I agree that there are moral issues, but the bank does not seem to agree with me.

Can anyone point me in the right direction for checking the legality of the contract before I make any more decisions, and hopefully to avoid outright war on this forum!!!

Sadly, this is a huge can of worms as so many contracts are faulty. My advice if you are in difficulty is get your loans checked out. If you are facing repossession of your car or your home, get your loan checked out. The problem is it goes on an on. Car loans, home improvement loans, secured loans and mortgages.