Unenforceable Loan Agreements and the Consumer Credit Act 1974

Posted by Asa Ghaffar Jan 5, 2009

I regularly get emails from people with serious debt problems asking what they can do to get out of debt. Financial difficulties affect every facet of peoples' lives. They cause marriage break-ups, health problems and can even result in suicide. No matter how bad things may seem, there is always a solution. There are a number of excellent debt solutions available, including an Individual Voluntary Arrangement (IVA) and a Debt Management Plan. Others can resolve financial issues by changing their lifestyle and cutting back on spending. However, an alternative debt solution has become available for those with credit agreements of up to £25,000. All agreements must have been signed up prior to the 6th April 2007. It is a debt solution that isn't like any of the others because it can result in the entire debt being written-off. The Consumer Credit Act 1974 places a requirement on lenders to comply with the legislation with regard to certain 'implied terms'. The following types of credit agreements are potentially unenforceable: Secured Loans, Unsecured Loans, Hire Purchase, Consolidation Loans, Car Loans/Finance, Credit Cards and Store Cards. It is believed that about 60% of all credit agreements aren't legally enforceable. My advice is to get your agreements checked over by a specialist solicitor to see if the debt can be written-off. A number of private companies are offering a free credit agreement audit. It is then the decision of the borrower whether they wish to proceed with a case against the lender. It could be potentially life-changing.