Rule 28 unregulated agreement

[San]

Thread subject should read: Rule 78

Hi,
Im new here and wondered if i can get some help.

My wife and I took out a remortgage in Oct 2004 for £22k. Payments at £333.06PM over 180 months at a eye watering 17.9%. We were not aware that the finance company were using the Rule 78 system until a few years ago. Since last year we have gone into arrears as we could only afford to pay £200pm.

Last statement in February 2013: Balance was £28,699.76 and arrears balance £2,388.02

The original agreement has no mention of Rule 78 so I need to know if their practise is illegal and if we have a claim of any sort.

Help!!!

[gravytrain]

Re: Rule 28 unregulated agreement

Sorry What is rule 28 ?

Do you mean rule of 78

[San]

Re: Rule 28 unregulated agreement

OOps yes, I meant rule 78

[gravytrain]

Re: Rule 28 unregulated agreement

rule of 78 is used to calculate sums due on an agreement it was supplanted by the actuarial method on agreements executed after may 2005.
It sounds to me like the account is in roll up, this is the old fashioned term which means that your monthly repayments have not been covering the interest which has been debited to the account, so in effect the balance instead of reducing is "rolling up".

Do you have other unsecured borrowing ?

[San]

Re: Rule 28 unregulated agreement

Yes that's right but if rule 78 was abolished in 2010 what happens now. Currently I don't have any unsecured loans

[gravytrain]

Re: Rule 28 unregulated agreement

Yes that's right but if rule 78 was abolished in 2010 what happens now. Currently I don't have any unsecured loans

I think it was 2005 as stated. In any case it was legal executed before this date.
There has been a high court case where the term in the agreement requiring the system to be used in settlement calculations has been deemed unfair and unenforceable It would perhaps be better if we could have a look at the agreement, could you put it on here minus your personal details of course.

[San]

Re: Rule 28 unregulated agreement

Ok, I don't have a scanner. Will try to sort something out