Court action against loan assignee for assignor penalty charges

**Amethyst** · 20th June 2018, 08:55:AM

When a debt is assigned fully it is rights and responsibilities so it would be the current owner of the debt.

If the current owner of the debt is suing you for payment then you can use the penalty charges in your defence to reduce the amount owed ( or file a counterclaim against them )

has a court order preventing legal claims against it

????

**aaronboii99** · 20th June 2018, 10:24:AM

Thanks Amethyst!

I'll explain the "court order preventing legal claims" bit first. This debt originated from a Welcome Finance loan, albeit a series or rewrites. Welcome Finance are protected by a Scheme of Arrangement, but having just done a bit more reading on the subject, I think I may have had the wrong end of the stick. The scheme bars creditors to Welcome Finance issuing any claims against them - so I'm guessing the context of being a debtor is completely different, and possibly not really relevant.

As you may be able to gather, I'm just trying to clarify some of the issues so that this can be tackled correctly. The first loan agreement (for £6,000) dates back to 2006 - secured by a legal charge - but was subsequently rewritten a number of times between then and 2008, eventually for a total of over £30,000.

To complicate matters, I stopped paying a while back under dispute. In the meantime, Welcome sold the debt, and I then had a PPI award from the FSCS - paid to the new creditor against the balance, but the new creditor proceeded to issue a Claim for Possession against me as a result of the arrears. Their claim was a shambles and I defeated them. I now want to address the substantial amount of charges they applied for all and sundry to some of the previous loans that were rewritten into this one. It's like they did what they could to inflate the balance, though the charges and high interest, then did the final rewrite in 2008 under a much more normal looking arrangement.

Hope you're still with me!

Therefore, in your opinion, can I correctly challenge those charges despite the fact that they affect the previous agreements/loans? The current creditor were quite open, when bringing the claim for possession, that the current loan is compiled as a result of rewrites (albeit they were very sketchy) - but I guess it was their attempt to validate the charge.

Finally, I'm well versed in the arguments against these penalty charges, but I have to say I'm reluctant to get back into a position of arrears such to push them to take me to court again. Maybe that's the only option, but do you think there are sufficient grounds for me to take them to court? I do get the fact that both scenarios are very different, and the one where they take me to court in pursuit of arrears would be much easier to bring the dispute into the fold. My defence of their recent claim against me was the PPI refund they received, so any dispute over unlawful charges was not given any real attention.

So... would the charges still be challenge-able due to the rewrites? ...and are there grounds for me to take the creditor to court, rather than the other way round? I appreciate there may not be a right or wrong answer, but all input is 'welcome'!

One more thing, If I may.... the account is technically still live, but the interest rate is set to 0% (Welcome did this). Would I have grounds to argue that the monthly repayment sums are net of interest, thereby fulfilling my right to repay the balance over the agreed term. The current creditor argues that the agreed monthly sums should be maintained, albeit this would mean a shortened repayment term. There are other issues that complicate the situation slightly, but I'll leave them out for now, but the judge in the claim did determine that the arrears due are based on the agreed monthly sums. However, it's complicated, and I do firmly believe that he was not going to be drawn on whether the arrears could be calculated on any other interpretation. He said it was a matter for myself and the claimant to sort out.

Sorry for the essay!

**DJMJ1975** · 16th November 2018, 21:19:PM

pt2537
whats your take on this?

**Rebz** · 22nd November 2018, 16:20:PM

for my 10pence worth, on the charges point. I'm not convinced that liability can be transferred by assignment (nor can the burden of a contract).

My understanding is that Legal Assignment does not transfer liability of the Assignee (see Patricia Jones V Link Financial Limited Jones appealed on whether an assignee was a "creditor" by which to take her to court as they could not via assignment take the duties and the definition of creditor under the CCA required a party to hold both the rights and duties of the original creditor. The appeal court found she was wrong on both counts and that what is transferred is the rights and any statutory duties that need be complied with so as to enable enforcement by the assignee. There was a specific distinction to pre-assignment liability.

Assignment is however subject to equities so there is a potential defence of set off in respect of any unlawful penalty charges (subject to there being a finding that they are unlawful/unfair) but there is no claim or cause of action, as such, to be had against the assignee who, as you say, have not imposed any charges. I therefore would not suggest a claim or counterclaim against them in that sense.

Its a complicated set of affairsand may be one to take specialist advice on. If it is regulated there may be an argument that the debtor-creditor relationship is unfair and challenge it that way under s140A CCA on your application but that places all of the rather expensive court fees on you and of course carries costs risks.

**DJMJ1975** · 22nd November 2018, 21:50:PM

Right firstly after final possession hearing which I won. Part of the judgement was that no fees/charges to be added to the account from March 2017. Any the new company added were removed. One judge asked for tr4 whatever that is? Don’t think it was produced. I obtained the deed or assignment from land registry myself. The charge relates a loan in 2006 with that account no at the top there were 3 further rewrites after this.

The original owners of loans from 2001 to last loan in 2008. I couldn’t claim against as they are in a scheme of arrangement. I when put the penalty and Ppi and irresponsible lending cliam to them. They sold debt on within weeks.

The penatly fees are from 2002 onwards. Each loan rewritten some months apart The very last rewrite in 2008 for just over 30k was the balance from a 2007 loan plus more Ppi taking new loan to more than the one before it. This loan is on CCA headed paper but apparently chanced to MCD.

Court action against loan assignee for assignor penalty charges