Debt escape court cases put on hold

[plasticdaft]

The system that is in place involves the use of insolvency practitioners and obviously if there was a way to self propose and manage an IVA then we would have no need for IP's and clearly a greater return would be achieved by creditors.
This may happen in the future but its not here right now. The fees are all written down prior to IVA's being proposed and accepted so there are no hidden costs now(perhaps there were in the not too distant past).And as Wonder points out who cares what the IP's getting as long as your debts are getting sorted,if its anyones concern it would be that of your creditors.
Some of the issues people may have over how much an IP gets may well come down to the relationship you have with your own IP. Not all IP's are as well thought of as Mel and David,in fact many Ip's appear to have horns as soon as IVAs have been accepted and become an enemy type figure. A lesson to anyone who is thinking of going for an IVA is to do your homework and only go with a company you have had someone recommend to you and dont look at just one firm,look at as many as you have time to.

[timeforchange]

Ok storm, you know your stuff and the legality aspect around debt avoidance. I am impressed.I like what you wrote.

The question is whether it is legal as in tax avoidance..YES it is, its about debt and will people please separate legal and personal opinions on the subject of avoiding debt!

One can quite easily say that an IVA is legalised debt avoidance....why and how does - cannot afford to pay give automatic {moral and ethical}considerations or rights to paying less debt to settle the sum...how many countries have IVAs?? Which clergy preaching ethics have endorsed this.?

Without the legal sanctions to {sanction paying less} there can be no IVA...its a purely legal invention and is not based on any ethical or morality script.I don't want to bring God into this, The King George version of the English bible never said pay less than your debt's worth? If you believe in a strong sense of Christian ethics then the IVA concept is secular.

If a friend borrows 25K from you and says sorry can't pay here's 4K...would you accept??? No...but if he is in an IVA you have to.

[cazlizzy]

I am not sure why you are here Newdeal...it doesn't seem to be for advice...you appear to know it all. It obviously isn't for support...unless you are showing your stress or whatever with anger...so I can only assume it is to create arguments. Your might be better served joining a debate forum, as this site is not a debate society.

[David Mond]

Hi all,

Some very interesting opinions and arguments here regarding debt avoidance or cancelling debt or being able legally to stop payment on debt incurred because of failure of the lender to provide evidence to support the lending contract.

Please see:

http://news.bbc.co.uk/1/hi/business/8037983.stm

As a Chartered Accountant and Licensed Insolvency Practitioner I am wrestling with myself as to whether it is appropriate advice for me to advise debtor's that a particular contract with a bank or credit card might be unenforceable because the lender cannot provide sufficient evidence to support enforcement of the loan (because they might have destroyed the original paperwork for example). The moral issue here is if the debtor, for example bought a car and still has the car and uses it, still owes the lender for the purchase of it, but is able to stop future repayments if this "unenforceable contract" claim is upheld.

If debtor's are successful then a debtor will not be able to claim back what has already been paid but will not have to make any future payments.

Now a debtor in an IVA therefore might want/wish for their Supervisor to make such claim against a lender which if sustainable would reduce the debt due and enhance dividends to other creditors.

How would the Supervisor(IP) be remunerated for such actions?

Should a Nominee at the time of preparing (on behalf) of a debtor a new proposal take recogniscence of such a potential claim? This would mean that the dividend prospects could be enhanced for other creditors.

I believe that there are an abundance of claims which no-one has any problem in sustaining in respect of:

(1) personal injuries
(2) endownment mis-selling
(3) Payment Protection Insurance mis-selling
(4) Excessive bank charges claims

There are certainly an abundence of organisations that will take on these claims on a no-win no fee basis which I believe is fair and reasonable.

However I have my difficulties in reconciling being able to get out of a repayment of a lending contract because the lender cannot enforce the contract.

Maybe the lender if he looses on the unenforceable contract point articulated here and in all the posts might fight back and commence their own actions against debtors for an "unjust enrichment claim"?
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[mole]

There are a lot of desperate people out there who for one reason or another have nowhere to turn. Sometimes they may just not understand their options and it is a an education issue. For others they may be stuck in a DMP lasting forever, not neet the criteria for IVA, have circumstances that prevent them going bankrupt. These people will likely cling to anything that offers them a 'lifeline'.

However, there are people that can resolve their debts that look at these options as an easy escape and in my view pursue this for the wrong reasons.

Companies offering this solution are therefore feeding on the needy and the greedy. From what I have seen they are not properly explaining that the debt is not actually cleared and that it is just unenforcable and will remain on your credit file. Also, unlikely an IVA, this is something someone can do themselves without the expense of paying a third party.

The only positive stories I have heard from this saga, is that some companies may be more understanding and agreeable to a settlement solution once the debt has reached the unenforceable state (i.e. agree to sensible payment plan or F&F settlement) when previously they were not interested in doing so. For someone in the "can't pay" rather than the "won't pay" category this may be their lifeline.

[stoneyB]

Quite interesting that the morality of not settling your debts is an issue here. There is a counterclaim that many lenders suffer from a lack of morality in the way this current economic situation was/is created. How moral is it for the credit card companies to charge the interest they do? They do it because they are legally able too. It's a dog eat dog world and I believe the creditors still have the biggest teeth by far!

[mole]

I think it is human nature for an individual to have a morality in his or her actions. Sadly, within large organisations this morality can be lost behind the anonymity of the organisation. They rightly or wrongly look at the bottom line and persue courses of actions within the legal, rather than the moral framework.
I think it is difficult for most individuals to separate themselves in this way.

[kallis3]

I feel a moral obligation to pay back as much of my debt as I can, after all, I was the one who took it out.

I have no wish to seperate the legal and personal sides - whether it is a legal loophole or not, I do not agree with people avoiding responibility for the paying of the debt they took out just because the law says they can.

As the majority of my debt was taken out before 2006, I am sure I could look into it - but I won't. I will pay back what I can and learn my lesson from it.

Timeforchange/newdeal - I am convinced that you are one and the same - if you do not like IVA's then why post on here? We are here for support and advice for the vulnerable and those seeking answers to their questions, not negativity which is what you generally post.

*They are two seperate people Jan[ well seperate IP addresses ] Andy Davie

[stoneyB]

I think it is more immoral for the organisation. Their processes and procedures are developed over timse and after much deliberation by very clever andd highly paid people to entice and exploit individuals for profit. They know exactly what they are doing which is more than can be said for all creditors!

[sparklywatcher]

I agree that banks are more than happy to up interest rates and up the credit limits allowing people to fall more and more into debt, however once upon a time there was no credit and people had to survive without store cards, bank loans and credit cards and finance to buy cars. It is of note that families back then tended to be closer because they all pulled together and worked hard, they ate meals cooked from whatever was available. There are some people out there that do not have any credit and they manage albeit it hard. We are not talking about people who got credit and because of circumstance can not pay it back, the morality being questioned is those that try to avoid their debt because they can not because they have no choice. Those that run up the credit on whatever they feel in the knowledge they can wipe it out using one of these schemes.

[stoneyB]

I don’t think these people (incidentally I am not one of them) that are using these schemes run up credit with the intention of wriggling out later, more a case of they have seen a loophole and are going for it. This is branded immoral and is probably right, however I think it is less immoral than the £50 bank charges imposed for slipping a few coppers over your overdraft limit. They make the rules, if they make them unenforceable why should people let them off because it’s immoral. They don’t reduce there immoral charges do they?

[sparklywatcher]

I disagree I know of people that got credit cards, loans etc.. and maxed them all out with the intention of going bankrupt. So there are people out there that are well aware of all the loopholes and use them to their advantage. But I agree with the banks, their charges are ridiculous however with people out there writing their debt off I guess they have to get it back somehow... there are always two sides to every story. Sometimes neither side is right

[stoneyB]

I agree "intention" is fraud however this loophole was not known before 2007. I thought it was recent and only can apply to debts taken out before 2007.

[kallis3]

It can only apply to debts before that date, but a lot of people's secured loans and credit card debts and even unsecured loans go back before that.

I agree that the banks should lend responsibly - I also agree that we as individuals should also borrow responsibly. We can always say no!

I do not, as certain posters have mentioned, think an IVA is debt avoidance. Debt avoidance is not paying them at all - we at least are doing our best.

[sparklywatcher]

No IVAs are not debt avoidance we are making efforts to pay back all we can to our creditors xxx

Which makes us all responsible people... a first for me I think [:)]