What Makes a Credit Agreement Unenforceable?
With credit card debts causing such financial stress for British people, it's not surprising that thousands of people are looking for any and all ways to get rid of these debts.
The most usual ways are the old standbys of debt consolidation and management programs, with possibly an Individual Voluntary Arrangement or even bankruptcy in extreme cases. Recently, however, a new method is becoming fashionable when it comes to solving credit card debt problems: the illegal credit agreement tactic.
This supposedly works by taking advantage of a loophole in consumer credit law that means that unless a credit card agreement abides by a set of stringent rules, then it is not valid and therefore can't be implemented in the courts. The upshot is is that any debt accrued under one of these agreements cannot be pursued by collectors, and so does not need to be repaid. There are plenty of companies claiming to be able to rapidly and easily arrange for your debts to be made uncollectable like this, but is this realistic?
Firstly, only agreement documents issued prior to April 2007 have the possibility of being declared unenforceable under this tactic. If this condition is met, there are a few reasons why the agreement may be uncollectible, including not being signed by both parties, the APR not being clearly expressed, or copies of the original papers not being available on requesting them.
Specialist solicitors will check over your agreements on your behalf to ascertain whether or not they are all binding. But here lies the gotcha: you normally are required to pay a fee before an agent will even look at your case, whether or not you have any chance at all of having your debts declared unenforceable. If you have two, three or even more credit agreements, this can make it a costly and possibly pointless exercise.
You should also consider that some less honest providers of this service exaggerate the chances of success, which many dispassionate commentators say are not as good as they are being described.
So what's the conclusion? By all means ask your credit card issuers for replicas of your agreements and look at them yourself, but before taking any further action talk to a free debt advisor. If you suspect you might have an unenforceable agreement, then look for an attorney willing to work on a no win no fee basis, rather than paying out at the outset in the maybe groundless hope of leaving your debt problems behind.