Sale of Debt Before Default Remedy Date

[QCKate]

Could someone please tell me what is the situation if a lender issues a default notice stating that the balance must be paid by X date to remedy the breach but then sells the outstanding dept before the X date.

Does that make the default notice invalid?

Does it make the sale invalid?

Does it make the CCA agreement invalid?

Anything else???

Thanks to you LBs.

QCK

[Amethyst]

Re: Sale of Debt Before Default Remedy Date

Are you still entitled to remedy the breach by the deadline given. ie. If you paid off the arrears in full on the deadline date would the agreement be able to continue ? (did they sell it as a debt for collection or a live agreement)

[Wombats]

Re: Sale of Debt Before Default Remedy Date

Is this any use?

http://moneyaware.co.uk/2011/09/defa...-do-they-mean/

Also, pm Andy58 who is likely to know the answer.

[Wombats]

Re: Sale of Debt Before Default Remedy Date

Is this any use?

http://moneyaware.co.uk/2011/09/defa...-do-they-mean/

The debt can be equitably assigned, but not terminated within this 14 day period (a DCA can ask for money, but enforcement action can't be taken).

My understanding from looking into this previously (and a very iffy memory) is that there are two types of breach. This is what the CCA says:

(1)The default notice must be in the prescribed form and specify—

(a)the nature of the alleged breach;

(b)if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken;

(c)if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach, and the date before which it is to be paid.

I think this answers your question. The relevant part of the CCA is Part VII:

http://www.legislation.gov.uk/ukpga/1974/39/part/VII

[Wombats]

Re: Sale of Debt Before Default Remedy Date

Duplicate post!

[QCKate]

Re: Sale of Debt Before Default Remedy Date

Thank you Amethyst

There letter says "outstanding balance sold to ABC on XXX. As the administration of your account has now been legally assigned to ABC, I would ask you to contact them directly to arrange payment."

QCK

[mystery1]

Re: Sale of Debt Before Default Remedy Date

No, No & No.

Can be sold.

Is it Fixed credit (loan), Running account (credit card) or HP ?

M1

[QCKate]

Re: Sale of Debt Before Default Remedy Date

Thank you. Credit card.

So when is the agreement with the original lender terminated?

QCK

No, No & No.

Can be sold.

Is it Fixed credit (loan), Running account (credit card) or HP ?

M1

[mystery1]

Re: Sale of Debt Before Default Remedy Date

In that case the right to borrow is probably gone so if the DN is remedied the obligation is to pay back but the new creditor doesn't have an obligation to lend only to recover.

Termination is not a requirement to sell.

M1

[Kafka]

Re: Sale of Debt Before Default Remedy Date

Thank you. Credit card.

So when is the agreement with the original lender terminated?

QCK

There's a difference between terminating the agreement and transferring ownership. In this case the original lender transferred ownership during the period following a Default Notice, but that was before they had terminated the agreement. Whilst this is unusual, I don't see why they shouldn't do this if they choose, because the credit agreements always allow the option of selling the account on.

The big deal here would be if the transfer compromised your rights to comply with the conditions stipulated in the Default Notice, or if the new owner defaulted the account before the stated date (for example). If they didn't happen, then I really don't see an issue with this. The DN stipulates that you must pay £X by Y date, and the change of ownership only alters the person you have to pay that money to.

What happened during the period of the Notice? Did you rectify the breach with the new owner within the timeframe?

[QCKate]

Re: Sale of Debt Before Default Remedy Date

No I didn't but here's another view I've been given.

The agreement would have to be terminated before the sale or before they can demand full premature repayment of all sums due.(otherwise you are still entitled to repay in instalments as per the agreement)

In that situation the agreement would not have been correctly terminated (not given chance to remedy as per the ac), which would mean that the new owner would not be able to enforce through the courts.

QCK

There's a difference between terminating the agreement and transferring ownership. In this case the original lender transferred ownership during the period following a Default Notice, but that was before they had terminated the agreement. Whilst this is unusual, I don't see why they shouldn't do this if they choose, because the credit agreements always allow the option of selling the account on.

The big deal here would be if the transfer compromised your rights to comply with the conditions stipulated in the Default Notice, or if the new owner defaulted the account before the stated date (for example). If they didn't happen, then I really don't see an issue with this. The DN stipulates that you must pay £X by Y date, and the change of ownership only alters the person you have to pay that money to.

What happened during the period of the Notice? Did you rectify the breach with the new owner within the timeframe?

[mystery1]

Re: Sale of Debt Before Default Remedy Date

No I didn't but here's another view I've been given.

The agreement would have to be terminated before the sale or before they can demand full premature repayment of all sums due.(otherwise you are still entitled to repay in instalments as per the agreement)

In that situation the agreement would not have been correctly terminated (not given chance to remedy as per the ac), which would mean that the new owner would not be able to enforce through the courts.

QCK

https://www.youtube.com/watch?v=Qphxc1CiQYE

M1

[Guest]

Re: Sale of Debt Before Default Remedy Date

The problem with assigning the debt before it is terminated is that the new owner wound not be able to remedy, nor would he be under any obligation to continue to supply credit, debts are routinely terminated before sale to DCAs for this reason.

DCA;s do not generally offer the facility to continue the functionality of an account after sale, they usually demand full repayment on receipt of the account, to do this the account must be terminated.

If the account was sold as a live account there would be no need for the original creditor to provide a section 87 notice at all, as the account would be sold as a going concern.

I agree with Clint though

[Guest]

Re: Sale of Debt Before Default Remedy Date

Incidentally there is a difference between the sale of agreements as in Egg to Barclay for instance, and the assignment of a debt under the LOPA.

The latter is what is used to transfer the rights under the agreement and is what is used to transfer ownership to a DC it does not transfer duties of the creditor, the new owner only gains the rights to reclaim the sums due under the agreement, he does not inherit any of the duties(ie providing credit)this is another reason why why he does not have the facility to remedy, and cannot issue a section 87 for arrears.

[mystery1]

Re: Sale of Debt Before Default Remedy Date

Incidentally there is a difference between the sale of agreements as in Egg to Barclay for instance, and the assignment of a debt under the LOPA.

The latter is what is used to transfer the rights under the agreement and is what is used to transfer ownership to a DC it does not transfer duties of the creditor, the new owner only gains the rights to reclaim the sums due under the agreement, he does not inherit any of the duties(ie providing credit)this is another reason why why he does not have the facility to remedy, and cannot issue a section 87 for arrears.

http://www.bailii.org/ew/cases/EWHC/QB/2012/2402.html

M1