Cabot Unenforceable

[basa48]

Re: Cabot Unenforceable

Hi All

I wrote the letter as advised to Cabot and have received the following response.

"As your account has not been terminated we have to advise you of any arrears that have accrued. In the event you do not remedy these arrears, a notice may be sent to formally advise you that your account is in arrears. If you are not in a position to clear the arrears on your account, we may have no alternative but to send you a default notice ......and a default may subsequently be registered with a credit reference bureau. As we explained in our letter dated 4th Sept, the decision not to pursue collection of your account should not be confused or interpreted as a write off of the outstanding balance as the debt legally remains and therefore we will continue to report to the CRAs accordingly"

I am really confused - how can they default an unenforceable agreement.

Please can someone help - getting really fed up with all of this now

thank you

njc12

Yeh that old thorny question.

From what I can gather creditors (and the courts) consider that even if an agreement is unenforceable it doesn't mean that no agreement exists (or did exist) and thus you can be in default of its terms by missing / not paying.

[FlamingParrot]

Re: Cabot Unenforceable

Hi All

I wrote the letter as advised to Cabot and have received the following response.

"As your account has not been terminated we have to advise you of any arrears that have accrued. In the event you do not remedy these arrears, a notice may be sent to formally advise you that your account is in arrears. If you are not in a position to clear the arrears on your account, we may have no alternative but to send you a default notice ......and a default may subsequently be registered with a credit reference bureau. As we explained in our letter dated 4th Sept, the decision not to pursue collection of your account should not be confused or interpreted as a write off of the outstanding balance as the debt legally remains and therefore we will continue to report to the CRAs accordingly"

I am really confused - how can they default an unenforceable agreement.

They can default you on a UE agreement as legal precedent was set in McGuffick v RBS, where it was established that reporting to the CRAs does not amount to enforcement: http://www.wragge.com/analysis_5241.asp#.UtWxaD-spr0

The meaning of enforcement

The Act does not define what constitutes "enforcement" and therefore does not define what actions a creditor may not undertake during a period when the agreement is unenforceable. The debtor argued that any coercive action to compel or secure performance of the removed obligation or liability of the debtor to make repayment amounted to "enforcement" including any reporting to CRAs.

Mr Justice Flaux concluded that not only did reporting to the various CRAs not amount to enforcement, but that a number of other activities did not constitute enforcement either, such as:

• reporting to CRAs without also telling them that the agreement is currently unenforceable
• disseminating or threatening to disseminate the debtor's personal data in respect of the agreement to any third party
• demanding payment from the debtor
• issuing a default notice to the debtor
• threatening legal action
• instructing a third party to demand payment or otherwise to seek to procure payment
• bringing proceedings.

Consequently, the injunctive relief sought on behalf of the debtor was refused for the above (and other) reasons.

[njc12]

Re: Cabot Unenforceable

Thank you Basa and Flaming Parrot for your responses - really good info in there.

I guess I will decide what to do next. Have some defaults on my file and really dont want another one

[FlamingParrot]

Re: Cabot Unenforceable

Thank you Basa and Flaming Parrot for your responses - really good info in there.

I guess I will decide what to do next. Have some defaults on my file and really dont want another one

I'm a bit intrigued about this, are you sure you haven't got a default for this account already? Because if Cabot is contacting you, that means the account has been sold to them, and debt purchasers only buy defaulted accounts, so the original lender should have recorded a default when you broke the payment arrangement. The CRA records should just be updated to reflect Cabot are the new owners, but the default should have been recorded before it was sold.

[basa48]

Re: Cabot Unenforceable

........The DN is a card to be kept up your sleeve till they issue proceedings, otherwise they can easily rectify it with a valid one as they seem to have done with you. ............

I'm not sure re-issuing a 'new' DN bearing exactly the same issue date and exactly the same date for remedy (i.e. 2009ish) would qualify as 'valid', more like an attempt to mislead someone who hadn't kept the original duff one !!