Requesting dummys guide to unenforcable debt

[eiggy]

Hello all

I'm planning to make a CCA request or two in the future and would like to be like to be properly armed.

I've found some great advice on here, I'm feeling empowered and pretty much up to speed as to what letters to send to the DCA/OC.

However, I'm still unsure what exactly is needed to make CC debt enforceable and what makes it unenforceable.

Also, do unenforceable debts remain on your credit file or do they have to be removed? Has anyone gotten debts removed from their credit file as they were deemed unenforceable?

Any advice greatly received.

[leclerc]

Re: Requesting dummys guide to unenforcable debt

No acknowledgement of the debt for 6 years(5 in scotland) makes the debt unenforceable in law as it becomes statute barred.

[eiggy]

Re: Requesting dummys guide to unenforcable debt

Thanks for the reply leclerc.

Apologies, I have been unclear, the debts I'm planning to challenge are not statute barred.

I have two defaults which date back to 2010 and I wanted to know what makes the debts unenforceable with a view to having the records removed from my credit file.

As neither the OC or DCA have taken me to court, and I recall repeated daily calls from the OC's in house DCA back in 2010/11, I assume the debts are unenforceable?

What must they produce under a CCA/SAR request to make the debts enforceable?

Assuming it a signed CCA, and they cannot produce it is the debt actually legally unenforceable and if so, can I then request that the default and all associated information is removed from my credit file.

[basa48]

Re: Requesting dummys guide to unenforcable debt

OK I'll have a stab at this!

For a credit agreement to be enforceable the creditor has to convince a judge that you did sign a credit agreement containing all the prescribed terms (i.e. a statement as to the credit limit, the applicable interest rate and how it may be varied and a statement of how the repayments should be made).

This is most easily achieved by producing a legible copy of the signed agreement which must have the prescribed terms as part of the documents you signed. But - there are also rumours that a creditor can make a case by showing that their procedures would only allow a credit line on receipt of such a signed agreement (although they may not be able to produce it), together with proof of usage (i.e. statements of debits and credits).

Also a creditor must issue a valid Default Notice and terminate the account before he can take enforcement action. However, if the OC stills owns the debt and the DN is faulty, I understand they can issue as many new DNs as they wish to 'get it right' before enforcement.

PS: I would say you have no reasonable chance or getting defaults removed from your credit file as these only record payment history which if you have defaulted (missed about 3 payments) would be regarded as accurate.

[eiggy]

Re: Requesting dummys guide to unenforcable debt

Hello basa48, thanks for the reply.

Interesting reading, you have touched on one of the areas I'm concerned about, the creditor making a case if they can produce statements etc.

I'm still drawn to the fact that neither the OC or DCA have taken court action against me and still wonder what exactly do they need to produce.

I appreciate I'm probably coming across as possibly opening a can of worms with this issue but to add a little more info (disclosed in a seperate thread), a DCA has out of the blue recorded a default with regards to one of these accounts, duplicating already recorded information from the OC, hence my poking around to see what action I can take.

[basa48]

Re: Requesting dummys guide to unenforcable debt

Hello basa48, thanks for the reply.

Interesting reading, you have touched on one of the areas I'm concerned about, the creditor making a case if they can produce statements etc.

Bit of a judge lottery really. If you are insistent that there were no PTs attached when you signed a credit application it forces the creditor to make his case. It helps if you have copies of the application (with no PTs of course). It helps if the application makes some reference to T&Cs as a separate entity.

I'm still drawn to the fact that neither the OC or DCA have taken court action against me and still wonder what exactly do they need to produce.

Depends how long they have been silent. They really need a signed CCA with PTs for a cast iron case. If you appear legal 'savvy' they may pick on easier targets.

I appreciate I'm probably coming across as possibly opening a can of worms with this issue but to add a little more info (disclosed in a seperate thread), a DCA has out of the blue recorded a default with regards to one of these accounts, duplicating already recorded information from the OC, hence my poking around to see what action I can take.

I'm not really all that sure about default markers with CRA's, but I understand OFT recommends no more than one per account. I think a DCA may record a default on a bought account but it should still show the date recorded by the original creditor and lapse 6 years after the original date of the default. But I may be wrong.

I'm not that bothered by CRA files as I have too many adverse markers to worry about one more and I hope never to need credit again! But IMO it is a foolish person who goes to court to remove default markers as this places a requirement on you to prove the agreement is unenforceable - an almost impossible task.

[eiggy]

Re: Requesting dummys guide to unenforcable debt

Great to get your opinions basa48, I can see how 'grey' this area might be!

[FlamingParrot]

Re: Requesting dummys guide to unenforcable debt

Thanks for the reply leclerc.

Apologies, I have been unclear, the debts I'm planning to challenge are not statute barred.

I have two defaults which date back to 2010 and I wanted to know what makes the debts unenforceable with a view to having the records removed from my credit file.

Unfortunatly, after the McGuffick judgment, you cannot have a default removed even when the debt is UE, the CRA files are meant to reflect your conduct with the account, if you broke the contractual agreement, that can be shown on your file even if they cannot recover the debt through the courts.

As neither the OC or DCA have taken me to court, and I recall repeated daily calls from the OC's in house DCA back in 2010/11, I assume the debts are unenforceable?

Could be, but not necessarily. Some creditors are more aggressive than others, sometimes they may do an assessment to establish whether it's worth their while taking you to court or not. I also have debts not paid in 3 years and they haven't taken me to court, but they are UE.

What must they produce under a CCA/SAR request to make the debts enforceable?

A SAR is purely for information purposes and has nothing to do with unenforceability. You'd send a SAR to obtain statements, copies of letters, etc. If they fail to comply, you can complain to the ICO but this does not affect the enforceability of your account.

What constitutes a properly executed agreement is laid down in section 61(1) of the Consumer Credit Act 1974:

61.(1) A regulated agreement is not properly executed unless;

• a document in the prescribed form itself containing all the prescribed terms and conforming to regulations under section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor or owner, and
• the document embodies all the terms of the agreement, other than implied terms, and
• the document is, when presented or sent to the debtor or hirer for signature, in such a state that all its terms are readily legible.

Section 60(1) says that the Secretary of State shall make regulations as to the form and content of documents embodying regulated agreements and these regulations are mainly laid down in the various schedules to the Consumer Credit (Agreements) Regulations 1983.

The agreement must have the following:

• A heading in the prescribed form giving the nature of the agreement (Schedule 1)
  Example:Credit Card Agreement regulated by the Consumer Credit Act 1974

• The name and address of both the debtor and creditor (Schedule 1)
  Example: Yours and the lenders name and address

• Financial Information (Schedule 1)

The financial information that must be present for the agreement to be properly executed depends on the type of agreement, abbreviated below;

loans for particular purchase (fixed-sum, debtor-creditor-supplier agreements) -
a description of the goods or services, the cash price and the amount of credit

advances -
the amount of credit

running account credit (overdrafts, credit cards) -
the credit limit

fixed sum agreements or fixed term agreements -
the duration of the agreement

fixed sum agreements -
the total charge for credit, rate of interest and how and when interest is applied (there are some exceptions to this - if payment interval and payment amounts are not both given) and the total amount payable

running account credit (and agreements falling within the exception above) -
total charge for credit broken down into constituent parts, rate of interest and whether it is fixed or variable, and how and when interest is applied.

all agreements -
the timing and amounts of repayments, APR

There are some minor differences for specific types of agreements.

• A statement of your rights (Schedule 2)
  Example: YOUR RIGHT TO CANCEL - Once you have signed this agreement, you will have a short time in which you can cancel it. The creditor will send you exact details of how and when you can do this.

• A signature box in the prescribed form signed by you (Schedule 5)

In certain circumstances the box explaining your rights may be omitted. However, it must be sent to you within 7 days of the agreement being signed otherwise the agreement is not properly executed.

If you applied online from January 2005, a tick box fulfills the role of a signature

If an agreement is not properly executed, as defined in section 61(1) of the Consumer Credit Act 1974, then Section 65 says that it can only be enforced by a court;

65.(1) An improperly-executed regulated agreement is enforceable against the debtor or hirer on an order of the court only.

However, the Court's powers to enforce an agreement that is not properly executed, that was entered into before April 2007 are limited by Section 127(3) of the Act;

127.(1) In the case of an application for an enforcement order under (a) Section 65(1) (improperly executed agreements)....

127.(3) The court shall not make an enforcement order under Section 65(1) if Section 61(1)(a) (signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under Section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner)...

This section says that an agreement that is not properly executed can only be enforced if it consists of a single document and is;

a) signed by the debtor, and
b) has the prescribed terms

The prescribed terms for enforceability under s127(3) are given in Schedule 6 of the Consumer Credit (Agreements) Regulations 1983:

For fixed sum loans the agreement must contain a term stating the amount of the credit
For running account agreements (such as credit cards) the agreement must contain a term stating the credit limit or the manner in which it will be determined or that there is no credit limit.

In all cases, the agreement must contain:

- A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following:

(a) number of repayments;
(b) amount of repayments;
(c) frequency and timing of repayments;
(d) dates of repayments;
(e) the manner in which any of the above may be determined, or in any other way, and any power of the creditor to vary what is payable.

All running account credit agreements and agreements for fixed sum loans which fall within certain exemptions (Schedule 1 paragraph 9 - usually if either of the other relevant prescribed terms are missing) must also have a term stating the rate of any interest on the credit to be provided under the agreement.

Therefore it is quite often the case that an agreement sent in response to a request under Section 77, 78 or 79 may fully comply with the requirements of those sections but not be enforceable. For example, a typical response from a credit card company consisting of a copy of an application form and a copy of recent terms and conditions would comply with s.79 but would probably not be enforceable for one of several reasons;

a) no signature (copy of unsigned application form)
b) no prescribed terms (interest rate, etc not on the form)
c) signature and prescribed terms not on one document (signed application form and recent terms and conditions).

Section 127(3) was repealed in the Consumer Credit Act 2006, which came into force in April 2007, therefore the enforceability of any agreement entered into after this date cannot be challenged by s.127. This doesn't mean that such an agreement is necessarily enforceable but it does mean that its enforceability must be argued on its own merits.

In addition to the above, there is a requirement that an agreement should be legible under regulation 2 of the Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983.

Assuming it a signed CCA, and they cannot produce it is the debt actually legally unenforceable and if so, can I then request that the default and all associated information is removed from my credit file.

No, see above. In McGuffick, the judge established that recording information with the CRAs does not constitute enforcement.

[FlamingParrot]

Re: Requesting dummys guide to unenforcable debt

Hello all

I'm planning to make a CCA request or two in the future and would like to be like to be properly armed.

I've found some great advice on here, I'm feeling empowered and pretty much up to speed as to what letters to send to the DCA/OC.

However, I'm still unsure what exactly is needed to make CC debt enforceable and what makes it unenforceable.

Also, do unenforceable debts remain on your credit file or do they have to be removed? Has anyone gotten debts removed from their credit file as they were deemed unenforceable?

Any advice greatly received.

Why wait? You'll be much better armed the sooner you send them, it's always good to know where you stand.

Below is the CCA request letter, it should be sent by recoreded delivery with £1 PO. Sign digitally usign a computer font rather than your real signature to be on the safe side. It should be sent to whoever is chasing you (lender or DCA). They have 14 days to reply.

This is very different from a SAR, which you'd send if you wanted to obtain statements to look at charges, PPI, etc. A SAR costs £10 and should only be sent to the OC, pointless to send one to a DCA.

Dear Sirs,

Account/Ref No:

With reference to the above agreement, I would be grateful if you would send me a copy of this credit agreement and a full breakdown of the account including any interest or charges applied.

A signed true copy of the deed of assignment of the above referenced agreement that you allege exists.

I understand that under the Consumer Credit Act 1974 [sections 77-79], I am entitled to receive a copy of any credit agreement and a statement of account on request.

I enclose a payment of £1 which represents the fee payable under the Consumer Credit Act 1974, and believe a copy of any credit agreement, along with a statement of account, should be supplied within 12 working days.

I understand that under the Consumer Credit Act 1974 creditors are unable to enforce an agreement if they fail to comply with the request for a copy of the agreement and statement of account under these sections of the Act.

I look forward to hearing from you.

Yours faithfully

Your name.

[eiggy]

Re: Requesting dummys guide to unenforcable debt

Flaming Parrot, your my hero! Thanks for taking time to post.

Can I be probe you a little on this...

My problem at the moment is no one is activity chasing me, a DCA has out of the blue made a duplicate entry on my credit file.

Both agreements are pre 2007, no court action since defaults in 2010... What if I was to contact the OC (without making a formal CCA request) and suggest that the debts are most likely unenforceable and I am willing to offer a percentage settlement as long as all information is removed from my credit file etc.

Or am I on a death wish! Lol

[FlamingParrot]

Re: Requesting dummys guide to unenforcable debt

Flaming Parrot, your my hero! Thanks for taking time to post.

Can I be probe you a little on this...

My problem at the moment is no one is activity chasing me, a DCA has out of the blue made a duplicate entry on my credit file.

Both agreements are pre 2007, no court action since defaults in 2010... What if I was to contact the OC (without making a formal CCA request) and suggest that the debts are most likely unenforceable and I am willing to offer a percentage settlement as long as all information is removed from my credit file etc.

Or am I on a death wish! Lol

I'd say it would be extremely unwise to do so. They wouldn't remove the defaults, the most they could do is mark them as satisfied, and by contacting them with a settlement offer, you'd be resetting the Statute Barred clock and wasting the past 3 years. I also have debts not paid since Jan 2010 and the last thing I'd want to do is restart the clock! :clock:

This question gets asked time and again, it's probably the most frequently asked question! Sadly, the answer is not what most people would like to hear, you'd be wasting your money and you only have 3 years to go till your file is clear, which in your case, would coincide with your debts going SBd. :grin:

The defaults should drop off in 2016. When debts are sold, you'd normally have a new entry on your file from the new owner, see below from the Guidance Notes:

The ‘sale’ or assignment of debts on defaulted accounts

52 When the rights to a debt are sold to a third party, the lender has to make sure the records with the credit reference agency are accurate, up to date and adequate. If they want information about the debts to continue on the credit reference file they will need to come to an agreement with the purchaser about who is to be responsible for this.

53 If the purchaser agrees to take control of the record, the customer should be informed that the debt has been sold or assigned and to whom. The credit reference agency file should be changed to show the name of the purchaser and that the rights to the debt have been sold or assigned. The purchaser should then make sure the record is kept up to date including changes to the amount still owed. The purchase should not affect how long the record is kept. It should be removed six years after the default.

54 Where the purchaser of the debt does not agree to take control of the record, the original lender, and at least in part the credit reference agency, will remain responsible if the original record is kept on the file. When the debt is sold or assigned, the customer will no longer owe any money to the original lender. If the record is not removed, the sale or assignment should be recorded and the balance should be shown as zero. The customer should still be told who the debt has been sold or assigned to.

[eiggy]

Re: Requesting dummys guide to unenforcable debt

FlamingParrot I can't thank you enough for the clarity. I will heed your advice as it makes perfect sense.

As this thread has gone on I'm starting to get the answers I was seeking to another question I posted today, would you be so kind as to have a look at this thread?

http://www.legalbeagles.info/forums/...on-credit-file

Your further thoughts around the sale or assignment of debts will be gratefully received.

Everything is starting to come together, thanks again.