CCJ Interest charged...want it back!

[lionbait]

Hi,

I hope that someone can help me further this. It is a similar situation to the thread titled "interest after CCJ Paragon Finance" and so the story goes...
I had an unsecured personal loan which I defaulted against (along with others). The creditors got a CCJ and the monthly payment I proposed was accepted. When I sold the house and payed off the CCJ they added some £6k "court interest" which they had to calculate before they could give me a settlement figure. I paid the amount (I realise this may have been a nieve mistake...) to release the remaining equity from our solicitor.
I have written to the creditor with the following...

From the advice given I understand that this interest has not been applied in a satisfactory manner as we have received statements over the last 30 months or so, showing zero interest being applied to this account. This lack of interest being charged during the loan period has misled us as to your intentions and has not shown honesty, integrity open and fairness on your behalf. Had you shown us the interest in the statements sent through we would have taken very different actions to manage our financial situation. I am frankly shocked that you have attempted to operate my account in this way.
I require repayment of the interest paid on completion of this loan in full. If you do not comply fully within 14 days then I shall begin a claim against you for the full amount plus interest plus my costs and without further notice.
Furthermore, I shall submit a Consumer Credit Act 1974 complaint to the OFT upon the basis that you have failed to comply with the OFT's direction of 5 April 2006 and are therefore not a 'fit and proper person' to hold a consumer credit licence under the 1974 Act. If you do not understand what this means then might I suggest you seek advice from your legal department.

Their 14 days are now up with no word...what should I do next??
Do I have a case? I move abroad in 1 month...what's the chances of getting it sorted by then?

Sorry about the long text

Thanks

[tomterm8]

I would suggest that you contact the specialist debt team at the CAB. i believe they are looking for an interest-after-judgement case.

[lionbait]

OK...great...is this the same as the national debt line?

If not, is there anyone you know of in particular that I should contact?

Thanks

[buster642]

Originally Posted by lionbait

Hi,

I hope that someone can help me further this. It is a similar situation to the thread titled "interest after CCJ Paragon Finance" and so the story goes...

Been a lot of these "interest after CCJ" cases lately.

As I would see this, the main problem is that creditors do have an implicit right to charge contractual interest, but they can only enforce it if it's in the original agreement (i.e. Paragon nasty tricks)

However, if you actually pay them, then this amounts to admitting the debt, which makes it very difficult to recover.

It's a bit like having a statue barred debt. They can't make you pay it, but if you happen to pay it without realising it was statue barred, you can't sue them for the money back because in the end, the debt was real - just not enforceable.

Good luck, but I think you could have a tough battle.

Anyone know of any law or precedent that statues whether contractual interes is valid or not.

PS. Note deliberate use of the term "valid", which is completely different from "legally enforceable" if you are trying to get it back.

[yaffsimone1]

Some credit agreements allow a creditor to add contractual interest on to the amount of the county court judgment.
This has been confirmed as legally binding following a Court of Appeal case taken by the Office of Fair Trading against First National Bank. This means that, while you are paying the county court judgment, contractual interest may be charged on the amount that you still owe on the judgment. This may not be made clear to you by the creditor. If this is the case, when you have paid the original balance owed on the judgment, you will find that you have an extra amount that you may still owe the creditor, even though the judgment has been paid in full. To force you to pay this, the creditor would have to sue you again.

You can try to stop any contractual interest being added by asking the county court to make a 'Time Order'. If the court agrees to make the time order, it can revise the rate of payment and alter the rate of interest, from that which is written in the agreement to that which it thinks is just and fair. This could mean a zero rate of interest, if the court agrees to make the time order in those terms.

[buster642]

Originally Posted by yaffsimone1

Some credit agreements allow a creditor to add contractual interest on to the amount of the county court judgment...
etc...

But this is whether a creditor can force him/her to pay the interest, which isn't really the issue.

This person has already paid it - the question is whether he/she can force them to give it back

And the two points above are not mutually exclusive. There are cases when a creditor can't force you to pay, but they cannot be forced to refund you if you do pay... statue barred debts.

[yaffsimone1]

Originally Posted by buster642

But this is whether a creditor can force him/her to pay the interest, which isn't really the issue.

This person has already paid it - the question is whether he/she can force them to give it back

And the two points above are not mutually exclusive. There are cases when a creditor can't force you to pay, but they cannot be forced to refund you if you do pay... statue barred debts.

If it was stated in the original contract that interest after a CCJ can be charged then no the consumer cannot force the creditor to pay them back. You say there are cases when a creditor cannot force you to pay...what cases are these? because as the law stands the creditor can sue you for it! Statue barred debt is not the issue here.

[buster642]

Originally Posted by yaffsimone1

If it was stated in the original contract that interest after a CCJ can be charged then no the consumer cannot force the creditor to pay them back. You say there are cases when a creditor cannot force you to pay...what cases are these? because as the law stands the creditor can sue you for it! Statue barred debt is not the issue here.

I'm using statue barred as an example of a debt which is valid, but not enforceable. Likewise a debt without a CCA is still a debt, but not legally enforcable

In both cases, they can't make you pay, but if you happen to pay, its doubtful you can force them to refund you.


Now assume that in this persons case, there was NO interest following judgement clause in the contract.

So they couldn't force him to pay.

However, he has already paid.

So the question is, can he force a refund, because even though the interest isn't enforceable, perhaps it is still a valid debt.

[yaffsimone1]

Originally Posted by buster642

I'm using statue barred as an example of a debt which is valid, but not enforceable. Likewise a debt without a CCA is still a debt, but not legally enforcable

In both cases, they can't make you pay, but if you happen to pay, its doubtful you can force them to refund you.


Now assume that in this persons case, there was NO interest following judgement clause in the contract.

So they couldn't force him to pay.

However, he has already paid.

So the question is, can he force a refund, because even though the interest isn't enforceable, perhaps it is still a valid debt.

Has it been established that there was not a interest following judgement clause in the contract?

Lionbait have you seen the agreement?

[lionbait]

Yes I have seen the judgement which says that the creditor can charge interest if the judgement is for more than £5000.
The debt was for more like £20000, so yes they could enforce it according to the judgement.

My arguement is that they did not tell me that they were going to charge it. I received statements from them saying that no interest was being charged. Therefore the debt was increasing by over £100 pcm without me knowing. If I had known then I would have made different financial decisions much earlier in the term of the CCJ. Indeed, if I hadn't sold the house I would still be unaware that they would calculate this interest when the debt was eventually cleared and the invisible interest would still be racking up at an ever increasing rate.
This doesn't seem to be in line with the Consumer Credit Act which requires open and fairness in the handling of accounts.

[yaffsimone1]

Originally Posted by lionbait

Yes I have seen the judgement which says that the creditor can charge interest if the judgement is for more than £5000.
The debt was for more like £20000, so yes they could enforce it according to the judgement.

My arguement is that they did not tell me that they were going to charge it. I received statements from them saying that no interest was being charged. Therefore the debt was increasing by over £100 pcm without me knowing. If I had known then I would have made different financial decisions much earlier in the term of the CCJ. Indeed, if I hadn't sold the house I would still be unaware that they would calculate this interest when the debt was eventually cleared and the invisible interest would still be racking up at an ever increasing rate.
This doesn't seem to be in line with the Consumer Credit Act which requires open and fairness in the handling of accounts.

Ok the creditor put in the judgement that they can add interest if the debt is more than 5K, but in order for this to be allowed it has to be stated in the terms of the original contract. They could be trying thier luck. The judge will not view the agreement before issuing a judgement he leaves it down to the creditor to make sure the information is correct. I would highly recommend asking for a copy of this agreement.