Has this been tested in court

[Rosiebowen]

This is my first posting as a new member, so a big hello to all fellow beaglers. I work as a volunteer for a well know help organisation, and hope that I can make some useful contributions to the forums in the future. But for now my query to fellow members.

If a lender writes off a debt, technically they receive value for that debt by offsetting it against the corporation tax they pay on their profits. I accept that the amount they receive will be less than the total balance outstanding, but, hey that's capitalism for you.

So at this point is the original contract completed ?

If they then sell the "debt" on to someone in the financial dregs market, without involving or advising the borrower, can the dregs merchant claim to have a legally enforceable contract with the borrower ?. Or do they rely on ignorance and fear to try to re-coup the full value of the debt for the 3% or so they paid for it.

In trying to fight these people we always ask for a copy of the original contract under CCA regs, but does the contract still exist at that point in time.

They are free to buy a record of the debt, a history of the debt, a memory of the debt, but can they buy the debt itself if it does not exist any longer.

It will take a far greater brain than mine to resolve this, but I'd really appreciate any feed back

[dogtired]

Re: Has this been tested in court

Hello and welcome, I am sure that some-one more knowledgeable than I will be along soon.
However what you have said has happened to me.
After a lot of postal tennis the original creditor paid me back the ppi and then sent me a letter saying that the account had been "settled in full" however it had already gone to a collection company who are still trying to say that it is valid and i still "owe" them as this letter was sent "in error", no evidence of this as yet and I am still waiting for feedback from the ombudsman.
DT

[Caspar]

Re: Has this been tested in court

It is for this exact reason it is absolutely critical to get any F&F settlement letter correct. The letter then effectively, in my understanding, becomes a "new" contract between the two parties, part of which states the debt is not only settled in full but cannot be pursued by any third party at any stage in the future.

I think a lot of people receive these "discounts" from DCA's, pay them thinking that's the end of it and it comes back later to bite them.

[Garlok]

Re: Has this been tested in court

Careful Casp,

Each case stands or falls on its own merits. CCA is irrelevant in F & Fs. You have trodden into the quagmire of the Common Law of Contract. May I suggest that the OP reads the sticky in the General Debt Forum "watertight F & Fs". In principle never try to do it without a third party "benefactor", then and only then does a legally binding agrrement exist between the benefactor and the creditor. No agreement as such can be binding with the debtor (Penny v Cole, the infamous Pinnel case of 1602)

Several memebers on here to my own knowledge have fallen foul of the shenanigans played by these people. It can be done as you say but care needs to be exercised.

regards
Garlok

[postggj]

Re: Has this been tested in court

interesting comment that garlok

how does it stand up when debts are assigned then by absolute assignment

is a third party needed

the point you raise is valid as in bill of sales also which have to be certified by an indaeendant source

not intending to go off topic but seems relevant

[Caspar]

Re: Has this been tested in court

Thanks Garlok. That is actually what I meant, but I just didn't make it clear enough. I appreciate you pointing it out!

[Garlok]

Re: Has this been tested in court

Blimey keith, this all gets a bit complex. But in general with agreements regulated by statute (e.g CCA1974) nothing changes at all other than ownership of an accounting asset. It is provided for both in the Statute and the regs. The agreement reamisn exactly the same, all obligations, responsibilities etc.

In the evnet of a F & F this is NOT regulated by Statute or the regs themselves. Every case stands or falls on its own merits as this is a matter for the Common law of Contract. hence the caution I have advised when dealing with them and the wordings of the correspondence. None of the case law provides a black and white statement to give guidance. getting ti wrong can be very expensive if it goes to litigation.

regards
Garlok

[mystery1]

Re: Has this been tested in court

In the evnet of a F & F this is NOT regulated by Statute or the regs themselves. Every case stands or falls on its own merits as this is a matter for the Common law of Contract. hence the caution I have advised when dealing with them and the wordings of the correspondence. None of the case law provides a black and white statement to give guidance. getting ti wrong can be very expensive if it goes to litigation.

regards
Garlok

http://www.oft.gov.uk/shared_oft/bus...dit/oft140.pdf

If the earlier agreement was regulated under the Act, it cannot
become unregulated because of a variation, unless the modifying
agreement is for running-account credit or is exempt under
section16(6C) or section 16C.


Consumer Credit Act 1974

82 Variation of agreements.

(1)Where, under a power contained in a regulated agreement, the creditor or owner varies the agreement, the variation shall not take effect before notice of it is given to the debtor or hirer in the prescribed manner.

(2)Where an agreement (a “modifying agreement ”) varies or supplements an earlier agreement, the modifying agreement shall for the purposes of this Act be treated as—

(a)revoking the earlier agreement, and

(b)containing provisions reproducing the combined effect of the two agreements,

and obligations outstanding in relation to the earlier agreement shall accordingly be treated as outstanding instead in relation to the modifying agreement.
[F1(2A)Subsection (2) does not apply if [F2the earlier agreement or] the modifying agreement is an exempt agreement as a result of section 16(6C) [F3or 16C] .]

(3)If the earlier agreement is a regulated agreement but (apart from this subsection) the modifying agreement is not then, [F4 unless the modifying agreement is—

(a)for running account credit; or

(b)an exempt agreement as a result of section 16(6C) [F3or 16C] ,

it shall be treated as a regulated agreement.] .
(4)If the earlier agreement is a regulated agreement for running-account credit, and by the modifying agreement the creditor allows the credit limit to be exceeded but intends the excess to be merely temporary, Part V (except section 56) shall not apply to the modifying agreement.

(5)If—

(a)the earlier agreement is a cancellable agreement, and

(b)the modifying agreement is made within the period applicable under section 68 to the earlier agreement,

then, whether or not the modifying agreement would, apart from this subsection, be a cancellable agreement, it shall be treated as a cancellable agreement in respect of which a notice may be served under section 68 not later than the end of the period applicable under that section to the earlier agreement.
[F5(5A)Subsection (5) does not apply where the modifying agreement is an exempt agreement as a result of section 16(6C) [F3or 16C] .]

(6)Except under subsection (5), a modifying agreement shall not be treated as a cancellable agreement.

(7)This section does not apply to a non-commercial agreement.






Not saying you are wrong but i think the cca & cputr would still apply.

M1

[Garlok]

Re: Has this been tested in court

I was talking about the Full & Final element only M1. If the full and final is negotiated properly then the agreement dies it cannot endure. You would be foolish indeed to let it run after a F & F had been put in place or to leave the loopholes in place. Please note that a full and final cannot be legally binding between the debtor him/herself and the creditor, it can only be legally binding on a third party and the creditor. Reference is always made to Penny v Cole (Pinnel 1602) opined upon by Sir Edward Coke at the time and referred to in just about every F & F negotiation by the creditor. This whether the agreement is regulated or not. If what you are saying is true then a regulated agreement cannot be an accounting asset which can be sold, which we all know it can. A full and final is in essence a disposal of that asset by its owner to a third party benefactor to the debtor.

Having been through it myself and have written at length on keeping these things tight a properly negotiated or more correctly properly executed procedure in getting an F & F will see the agreement die. You would be mad to set it up otherwise.

Assignment which the OP is overlapping here is a different kettle of fish and the agreement endures bearing with it to the purchaser all the responsibilies and obligations of the original agreement.

There is no definitive case law on F & Fs and each case will stand or fall on its own merits. Unfortunately that is the way it works.

regards
Garlok

[Guest]

Re: Has this been tested in court

HI
Please Rosie correct me if i am wrong but i don't think the above is answering the question you have asked.
I take it you are refering to a debt that is sold to a DCA.
The answer is, it depends on the kind of sale. If the debt is assigned to the DCA then by law you must be notified, then they have all the rights and obigations of the original debtor.
THe creditor can if he wishes, assign only the equity of the debt which means that they can chase the debt itself, but not be under any of the obligations imposed by the agreement. It also means that they cannot sue for the money without passing the debt back to the orriginal creditor.
Peter

[winner12]

Re: Has this been tested in court

Hi Peter
Im reading this one with interest and learning all the time so thats where the Hot Air waffle comes from with DCA threats if they dont own the debt they cant take you to court only the OC can do that
am I correct

[Caspar]

Re: Has this been tested in court

Yes.

Absolute Assignment = Assignment of rights and duties

Equitable Assignment (aka Simple Assignment) is what Peter refers to above, and as the name suggests an assignment of only the equity, thus they cannot enforce the duties (or obligations as Peter puts it).

It is pretty rare now for a DCA to have an Absolute Assignment so their threats are usually meaningless and they are impotent to do anything.

In the debt section there is an article on types of assignment you may find interesting.

[Crispybacon]

Re: Has this been tested in court

Hi Rosie

Have a read of this thread on debt assignment:

http://www.legalbeagles.info/forums/...ead.php?t=9119

Crispy
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Hi Peter
Im reading this one with interest and learning all the time so thats where the Hot Air waffle comes from with DCA threats if they dont own the debt they cant take you to court only the OC can do that
am I correct

Hi Winner

Yes you are learning that almost everything a DCA tells you is hot air and waffle and phrased in a way to intimidate.

Best

Crispy