Unenforceable Loans. Can you legally write them off?
Yes, you can challenge unenforceable loans and credit cards by checking if the credit agreement complies with the consumer Credit Act 1974. Unenforceable credit agreements can included loans, credit cards and store cards taken out before April 2007.
The Consumer Credit Act 1974 was introduced to protect consumers from lenders, banks, loan and credit card providers. It sets out guidelines that must be followed by banks when providing documentation for loans and credit cards agreements.
You can challenge a credit agreement by asking the lender to provide a true copy of the credit agreement. Once you have this, the agreement can be examined to decide whether or not there have been any breach of the law. This could entitle you to compensation. In some cases the lender may be unable to provide a copy of the agreement and if this is the case you would not have to repay the money due on your loan.
How can an credit agreement be unenforceable?
Interest Rate and APR miscalculations
The Consumer Credit Act says that the credit agreement must contain a term which sets out the rate of interest that is being applied and that the interest rate accords with the APR that has been calculated. If this has not been set out correctly, you have an entitlement to seek the write-off of the entire outstanding balance owing under your credit agreement due to it being unenforceable.
The lender can’t provide the correct documents
If you request a copy of your credit agreement and the lender fails to provide a True Copy the lender cannot enforce the agreement until such time as a copy has been provided to you. The lender commits an offence if the default continues for more than a month. Where the lender has lost the agreement the terms of the Consumer Credit Act have been breached. An application can be made to the court asking that the lender writes off the agreement.
Non-disclosure of commissions and fees
When a lender has paid a commission to a broker or other financial introducer the sums paid to the introducer should be disclosed on the loan agreement under the heading total charges for the credit. If the lender has failed to disclose the broker’s commission as part of the total charge to you for the credit then the agreement may be unenforceable.
Mow much does is cost?
The cost of instructing specialist Claims Management Companies vary, but they can help you to check your credit agreements and see if there has been any breach in the Consumer Credit Act 1974. Their claims experts have varying degrees of success with unenforceable loans and credit card agreements, prices vary from £345 to £500. It is important to make sure they are regulated by the Ministry of Justice and always ask to see examples of their success.
I recommend visiting www.CreditIssuesUK.co.uk and taking their online test to see if you qualify to challenge your unenforceable loans and credit cards
Kerry Jonas is a writer and comments on Unenforceable Credit Agreements, Mis-sold Payment Protection Insurance, Debt Advice, the Banking Sector and the Financial Industry in the United Kingdom. Article Source:http://www.articlesbase.com/personal-finance-articles/unenforceable-loans-can-you-legally-write-them-off-1407324.html
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