Re-issuing Defalt Notices

[basa48]

Just a general enquiry (or two!!)

Am I right in assuming only the original creditor can re-issue a Default Notice (following say the issue of a faulty one) and if the account has been assigned the assignee would have to pass the account back to the OC to re-issue??

Secondly, if an account that is NOT in default is assigned does the assignee have to honour the original credit agreement and provide a line of credit ?? Would this not have to be the subject of a new credit agreement ??

Just asking

[mystery1]

Re: Re-issuing Defalt Notices

Am I right in assuming only the original creditor can re-issue a Default Notice (following say the issue of a faulty one) and if the account has been assigned the assignee would have to pass the account back to the OC to re-issue??

No.

http://www.legislation.gov.uk/ukpga/1974/39/section/87

87 Need for default notice.


(1)Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice ”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—
(a)to terminate the agreement, or
(b)to demand earlier payment of any sum, or
(c)to recover possession of any goods or land, or
(d)to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or
(e)to enforce any security.
(2)Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.
(3)The doing of an act by which a floating charge becomes fixed is not enforcement of a security.
(4)Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

Secondly, if an account that is NOT in default is assigned does the assignee have to honour the original credit agreement and provide a line of credit ?? Would this not have to be the subject of a new credit agreement ??

Yes, the agreement would remain in force but many have termination clauses and clauses to restrict credit. No new agreement is required.

M1

[Guest]

Re: Re-issuing Defalt Notices

Yes open ended agreements can be terminated under a contractual term .

There are amendment to the CCA which enable section 87 to be bypassed for the contractual termination function in section 98a and section 87 4

http://www.legislation.gov.uk/uksi/2...lation/37/made

Once terminated I see no reason why they cannot be sold, however I would imagine that before any action for sums not yer due under the terms would not be reclaimable without the issuance of a DN and chance to remedy, this does not mean that the facility to draw down credit would be returned of course.

[basa48]

Re: Re-issuing Defalt Notices

Of course I do appreciate the need and perhaps the right of an assignee to issue a DN after a default, but does that answer my question about the assignee issuing a second DN after the OC originally issued a faulty one (and subsequently terminated and assigned the account / debt).

[mystery1]

Re: Re-issuing Defalt Notices

The assignee becomes the creditor. http://www.bailii.org/ew/cases/EWHC/QB/2012/2402.html


The termination is invalid if the it is based on a faulty DN and an invalid DN isn't worth the paper it's written on but a new one can be issued http://www.bailii.org/ew/cases/EWHC/...e/2011/B3.html

M1

[Guest]

Re: Re-issuing Defalt Notices

Of course I do appreciate the need and perhaps the right of an assignee to issue a DN after a default, but does that answer my question about the assignee issuing a second DN after the OC originally issued a faulty one (and subsequently terminated and assigned the account / debt).

The agreement cannot be assigned until it is terminated(unless it is sold as a live and operating one), so unless a compliant notice is issued the agreement cannot be assigned after breach(uless it is terminated via a contractual term).
The debtor has to be given the opportunity to remedy before the total account on the agreement becomes recoverable by an action, whoever takes it.
There are cases OTR where accounts have had to be passed back to OC's because they have been incorrectly terminated on a failed court action due to a defective DN.
It depends very much on the individual circumstances of the case.

[basa48]

Re: Re-issuing Defalt Notices

The assignee becomes the creditor. http://www.bailii.org/ew/cases/EWHC/QB/2012/2402.html


The termination is invalid if the it is based on a faulty DN and an invalid DN isn't worth the paper it's written on but a new one can be issued http://www.bailii.org/ew/cases/EWHC/...e/2011/B3.html

M1

I'm familiar with this case, but there it is still the OC who is the owner and can issue the new DN.

[basa48]

Re: Re-issuing Defalt Notices

The agreement cannot be assigned until it is terminated(unless it is sold as a live and operating one), so unless a compliant notice is issued the agreement cannot be assigned after breach(uless it is terminated via a contractual term).
The debtor has to be given the opportunity to remedy before the total account on the agreement becomes recoverable by an action, whoever takes it.
There are cases OTR where accounts have had to be passed back to OC's because they have been incorrectly terminated on a failed court action due to a defective DN.
It depends very much on the individual circumstances of the case.

Yup and a real can of worms flung open I'm sure.

[toomanycalls]

Re: Re-issuing Defalt Notices

I've got an interesting one coming up and I'm going to be deliberately a little vague on details as its in court next month.

A bank I had a loan with issued a DN (faulty) and court papers on the back of it. After AQ they realised the errors on the DN were fatal and reissued it. I paid it and they were forced to withdraw with costs.
Couple of months down the road they mistakenly reissued on the paid DN and were forced to withdraw again when the errors were pointed out.
Two years down the road and they issued another DN (faulty) and issued a claim. Defence was put in and they reissued the DN and requested permission to change POC to reflect new DN. My solicitors are arguing no right to bring the claim as no effective DN when brought.... We'll see.

From my point of view, even when I paid the DN at no point did the OC return the loan account to the point before it had occurred.

[toomanycalls]

Re: Re-issuing Defalt Notices

I also have another ongoing claim where the CC account was sold while in the period to rectify the DN thus prematurely terminating. Where does this stand?