Tuesday 9 December 2008

Can you get your credit card written off?

Is your credit card agreement unenforceable?
As many people are coming to understand if a credit card was taken out prior to the 6th April 2007 there is a very significant chance indeed that it is an unlawful credit card agreement and it is possible to write off the debt. The Consumer Credit Act 1974 has a fundamental requirement that any agreement must comply with certain prescribed terms.
Examples of Unenforceable Credit Card Agreements
• The lender doesn't have a copy of the agreement.
• The amount of credit (or credit limit) hasn't been stated on the agreement.
• The interest calculation is incorrect.
• The agreement hasn't been signed by both the debtor and creditor.
• An increased credit limit has been provided on a credit card agreement without it being requested.
• The credit charges are not deemed to be fair.
• No rate of APR is displayed.
• There is no mention of any 'cooling off' period.
What will be the result if the credit agreement is lost?
Sending the lender a S77 request entitles the borrower to get a copy of the credit card agreement. It is necessary to include a postal order for £1 as required by the act.
The lender has to send a copy of the agreement within 12 days failing which it is in default. If the lender cannot provide a copy of the actual, signed credit agreement they aren't in a position to enforce the debt as it is an illegal credit card agreement. It is then possible to require them to remove data they hold about you from their records and those held by credit agencies.
Will This Have a Negative Impact on Credit Ratings?
Provided payments are kept up during the legal challenge, no credit rating will be affected. Those who have adverse credit will actually improve their credit rating. This is because the debt was deemed to have never technically existed so no adverse credit entries can be registered for a debt that doesn't exist. These entries can be removed when a case is successful.
How Long Will it be Before the Outcome?
The duration of any case does vary depending upon the institution and complexity of the case. Most cases are usually settled within 6 months, sometimes a lot sooner.
What Happens if the Unlawful Credit Card Agreement Case is Successful?
If it is decided that there is an illegal credit agreement, it is possible that the entire debt will be written off. This will mean that the balance is completely wiped and will not show on credit reference agency records.
What About Credit Card Debt that Cannot be Written Off?
For more recent credit card debts that cannot be written off, it is worthwhile considering a Debt Management Plan or even an Individual Voluntary Arrangement (IVA). It is imperative the serious debt problems are dealt with as efficiently as possible.
So it is possible to get debt written off yourself but most companies will only take seriously a threat issued by a solicitor.
IF YOU HAVE A CREDIT CARD AND YOU THINK THAT YOU MAY BENEFIT FROM A REVIEW OF THIS CARD AND WHETHER IT COMPLIES WITH THE CONSUMER CREDIT ACT 1974, PLEASE CONTACT THIS FIRM WITHOUT FURTHER DELAY.

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