Consumer Credit Debt Write Off: the Truth

Do you have a debt that cannot be repaid? Have you been told that it can simply be written off. Read this article to learn the triuth about how these debts can be legally handled.
By: Goddard Smith Solicitors
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Consumer Credit
Debt Write Off
Claims Management
Credit Card Debt


Wigan - Lancashire - England

Aug. 10, 2009 - PRLog -- Can you really ‘write off’ a Credit Card or Loan? The truth behind the hype.

Over the last few month there has been a lot said about writing off credit card debt or loans, legally. But is it really true that these debts can simply be written off? Well, actually, no.

Below, Mark Smith, from Goddard Smith Solicitors, who have won several settlements and a trial against high street lenders, explains how it really works.
“What all of the companies offering a debt “write off” service are talking about is actually a request to the court to confirm that the credit agreement cannot be enforced against the borrower. This means that if an individual successfully asks the court to confirm that the debt could not be enforced, they could choose to stop paying the debt. The lender then can no longer use a legal mechanism to enforce the debt against them. This means no CCJ’s, no charges on any property, no bailiffs and no bankruptcy petitions.
Many people are skeptical about this, as the old adage goes, ‘if it seems too good to be true it probably is’. Well not in this case. The law in this area is quite technical, and it must be stressed that if you intend to look into this, you should go directly to a solicitor, and not go through any type of third party organisation, as not all being very open about what can be achieved.

The legal bit
Put as simply as possible, if a person has taken out a loan or a credit card before April 2007, for a value lower than £25,000, there is the possibility that that loan or credit card agreement will be declared to be unenforceable by the court.
The law states that if the original credit agreement, as signed by the debtor, fails to comply with section 65(1) of the Consumer Credit Act 1974, relating to improperly executed agreements, then the agreement is ‘improperly executed’. This term means that the agreement was not properly constructed and signed in the first place. If a lender wishes to enforce a debt, which has arisen from an improperly executed agreement then the lender must obtain a court order.
However there are certain rules that the lender must comply with, and if he does not, he will not be entitled to a court order, and therefore the debt will not be enforceable against the borrower. The signed credit agreement must provide certain information and that information must be correct. The credit agreement has to state the total amount borrowed and the correct rate of interest payable on the credit. There are other requirements, such as whether the signature and cancellation requirements have been met, which must also be followed. Essentially though, where information is omitted or inaccurately displayed on the credit agreement, the credit card or loan agreement is unenforceable.
Further if a person was told that they had no option, or were just given a payment protection insurance policy (PPI) it was probably miss-sold to you and the miss-selling of this product may also render the loan unenforceable.

Does this mean the debt is written off?
Not exactly, the debt still exists, and it just sort of sits around in the background. However it cannot be enforced against the debtor. So if the debtor then chose not to pay the debt, the lender could do very little about it. This is similar to an illegal gambling debt (only without the threat of a baseball bat).

If you would like to challenge an agreement, seek suitable legal advice directly from a specialist solicitor, as there are many pit falls. If you were to take the lender to court for a declaration of unenforceability on your own, and you lost, you may be responsible for paying the lender’s legal fees. This can run into thousands of pounds.
Most solicitors can obtain insurance policies on your behalf to protect you from this situation. Usually you don’t need to pay for the policy upfront, and if you win the cost of the policy can be recovered from the lender. Also the policies are often designed with solicitor’s clients in mind and they are therefore ‘self-insuring’. This means that if the claim was lost the policy premium would be paid off by the insurance company as an insured risk. Therefore in most cases the person bringing the claim does not have to pay for the insurance policy, and they are protected against the lenders legal fees if they did lose the claim.”

If you would like to investigate your loan agreement further you can contact a specialist solicitor like Goddard Smith Solicitors,


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GoddardSmith Solicitors are a full service law firm based in Pemberton, Wigan. They offer a full range of legal services for commercial, corporate, public sector or consumer clients. They can be contacted on 0800 160 11 44, alternatively visit
Tags:Consumer Credit, Debt Write Off, Claims Management, Credit Card Debt
Industry:Financial, Consumer
Location:Wigan - Lancashire - England
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