A caller this week informed me that she had written to all of her creditors requesting copies of her original credit agreements covering her substantial and numerous debts.
Her expectation, in part gleaned from a number of websites but also from the personal experience of friends, was that a number of her creditors would have difficulty in providing these.
If this were the case the debts might become legally unenforceable and therefore might be left outside of a potential IVA or DMP arrangement.
She had already contacted CCCS and she reports (and I cannot confirm whether or not this is correct) told her that they would not be prepared to represent her unless potentially unenforceable debts were included in her arrangements.
Very interested to know what the community thinks about this; not least the IVA experts and how they might treat a potentially legally unenforceable debt in an IVA?
Andrew Graveson
Bright Oak Ltd
UK Debt Management Company
Website: www.brightoak.co.uk
A debt is a debt when it is subject to a contractual agreement which is acknowledged by both parties, and to which both parties are bound.
If a client came to me for advice, and confirmed that they believed that they owed a debt to XYZ Limited - we would accept that and ask the lender to confirm the amount owed. If the lender confirmed the amount, and my client acknowledged that is was due, I would allow the claim into the insolvency, notwithstanding that it may not be legally enforceable. "Not legally enforceable" does not mean that the money was not lent in the first place.
So I am inclined to agree with CCCS on this one occasion, but I am sure with the number of professional experts now posting on the forum it will attract lively debate!
If the potential client refused to accept that there was a binding contractual agreement (because the lack of a produceable credit agreement meant that the debt might be legally unenforceable) and the counterparty could not prove otherwise how would others who work in the middle of this react?
To me it seems likely that the money was lent and borrowed in good faith and that this must be considered. How would others consider a client's instruction if they refused to agree that a debt was due because no agreement could be produced?
Andrew Graveson
Bright Oak Ltd
UK Debt Management Company
Website: www.brightoak.co.uk
You would need to find out why they refused to agree the debt was due. If, solely on the grounds that they felt they could benefit from a legal loophole, I would take a dim view of their integrity, and would probably decline to enter into a relationship with them where I needed to rely on them and trust them for a five year period.
My view, of course, does not mean that this is the right answer! Will be interested to see others views in the morning.
Just because an agreement could not be found does not make the debt unenforceable. Why has the debtor been making payments on same?
I am inclined to side with Melanie on this one -however there is a growing business now of suggesting that certain written agreements might not be enforceable - but the money was borrowed in goodfaith - over to you Melanie
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
"A caller this week informed me that she had written to all of her creditors requesting copies of her original credit agreements covering her substantial and numerous debts."
She obviously knows she owes the company to contact them and ask for doccuments.
I agree with Mel and David. In fairness to the creditors, if somebody enters into an IVA they are agreeing to write off some of that debt.
Just because they dont provide the doccuments does not mean the debt does not exist.
If it was me i would have to ask myself.....what if during the course of my IVA, the said creditor then showed proof of the debt?
It would leave me in a very sticky situation.
Its only fair to yourself and the creditors, to include ALL debts to avoid any nasty surprises in the future.
I don't concur with debt avoidance, whatever the reasons. So, if faced with this issue, would probably decline to act. If, however, the debtor had obtained a letter from the creditors clearly stating that they had no debt, that would be a different matter, as by that the contract would have been cancelled.
I would agree that if the money is borrowed and repayments made then there is clearly an obligation by the borrower to deal with the outstanding balance. There are sufficient ways available to deal with a debt without wiggling out of the agreement and pretending it is not a valid loan agreement.
There is now a whole new industry emerging where companies will challenge the validity credit card / loan & secured loans. I suspect that this will have a short window and the initial excitement will calm down.
I have had only one occasion ( recently ) that when we asked a lender to confirm the balance of an account they catagorically confirmed that the debt had been written off and there was nothing outstanding and the account closed.
On this occasion we took the lender at their word and dealt with the other debts accordingly leavng out their debt.
Paul Johns
Reviva UK
Assisted Bankruptcy Specialists www.revivauk.com
This subject is a difficult and very personal issue. It ties into the moral, legal and responsible views and feelings of the debtor and how they are to deal with a hard situation.
There is now a growing market for loophole finding and this area is seeminly highly profitable for companies to provide this service, wher I live there are radio ads for this servicee which will charge £500 per credit card debt to represent clients. My own view and not one that will be popular is if like us people are struggling to sort things out and the routes of IVAs etc are currenly closed then any option to clear your debts should be given consideration.
i have read on another forum where (when a debt is sold to another company ie a dca)that you can ask for a copy of your comsumer credit agrement off the new creditor and if they can't produce this in 12 +2 days the new creditor is in default of your request and you can suspend payments untill this document is produced .
not sure what happens though if the d.c.a cant produce it though
you would think a d.c.a would ask for the agreement before buying the debt in the first place .
there again there are a lot of people out there who dont want to pay back any of thier debts so a loophole market will do a roaring trade
It seems a very shady area but it is the way of the world these days. I get no end of emails on speeding ticket/parking ticket/clamping avoidance and all the loopholes you can use if caught.
i would never dream of asking my creditors to prove the debts if I knew I had them, obviously if someone came at me with one I did not recognise that would be a different matter, I borrowed the money fair and square and need to deal with it.
I suppose people will try this though, but not for me.
Emma
Be positive & look after yourself, there are more important things in life than debts....
Can you send me details of the loophole on speeding fines please Emma! I have been yet again caught on camera - only two months after getting rid of the six points I already had!
I signed up to a website ages ago and I get bombarded with emails about how to get out of all kinds of driving dilemmas - you will get thousands of emails if you sign up to it.
Have you got a speed camera locator or sat nav with this feature as it has saved me no end over the years. if you remember it was stolen when my car was broken into a while back but my lovely dad brought me a new one as if I lose my licence thats my job gone[:I]
I also got a new car last week and it is far faster than my old one[:0]
I have set the speed camera locator to beep everytime I go 10% over the speed limit to keep me aware[;)]
Be positive & look after yourself, there are more important things in life than debts....
I too have just got a new car with that facility on! Need to pay more care and attention in future I think, or I will never be destined to have a clean licence.
