Defaulted more than once on the same debt?

[militantconsumer]

Hi

 

Can you be defaulted on the same debt more than once?

 

My friend was defaulted on several accounts in summer 2005 so the defaults are now more than half way to dropping off her credit files.

 

She has been paying negotiated monthly amounts ever since but now wants to stop paying because she realises the agreements are probably unenforceable.

 

The main thing she is worried about is receiving another default now, which would re-start the 6 year clock again.

 

Is this possible/likely/legal?

 

Thanks for any comments.

[dx100uk]

NO CCA=NO PAY

this also means they cannot default, pass on or add to the debt.

 

tell her to stop worrying.

 

dx

[militantconsumer]

There are signed CCAs for both accounts but we believe they are unenforceable.

 

She was already defaulted back in 2005 and is now on a payment plan.

 

When the payment plan expires we want to stop paying but are worried they will immediately issue a fresh default.

 

Can they do this or not? Do they normally do this or not?

 

Sorry if these questions have been answered before, but I can't find the answers. Is there a CAG guide to credit reference agencies, defaults, etc. anywhere?

[dx100uk]

why do you believe they are unenforceable?

 

dx

[militantconsumer]

1. Egg Card

Unenforceable due to the fact that it is a multiple agreement (cash loan + PPI) but the prescribed terms are only set out in total. This loan agreement is actually featured in the CAG guide to credit agreements and declared unenforceable by the site team - in post #9 here:

http://www.consumeractiongroup.co.uk/forum/general-debt-issues/162851-consumer-credit-agreements.html

The full case can be found here:

http://www.consumeractiongroup.co.uk/forum/egg/174507-militant-consumers-friend-egg.html

 

2. Egg Card

Due to the fact that the agreement is missing the prescribed term "credit limit". My agreement is the same as the one in this thread, again declared unenforceable by a member of the CAG team:

http://www.consumeractiongroup.co.uk/forum/egg/177463-response-our-egg-cca.html

More details on the case can be found here:

http://www.consumeractiongroup.co.uk/forum/egg/178357-militant-consumer-challenges-egg.html

 

 

Having established that these agreements can almost certainly not be legally enforced, we turn to the issue of how to deal with the situation. My friend would like to tell Egg that the accounts are in dispute and stop paying, but is worried about new default notices being issued in 2009, thus re-setting the 6 year clock so that she has to wait until 2015 instead of 2011 for a clean(ish) credit rating.

 

Hence the question in the title of this thread!

Edited February 1, 2009 by militantconsumer
'stop paying' added

[dx100uk]

rigth then

exactly what i said.

 

NO CCA = NO PAY

 

and they cannot enforce collect pass-on or default the A/C

 

end of subject

 

dont worry

 

dx

[militantconsumer]

Thanks dx

 

But do you have a link to these rules so that I can reassure my friend?

[dx100uk]

Send by recorded....and edit as required

 

Account In Dispute

 

Ref:

 

Dear Sir/Madam

 

Thank you for your letter of xx/xx/xx, the contents of which have been noted.

 

You have failed to respond to my legal request to supply me a true copy of the original Consumer Credit Agreement for the above account.

 

On **DATE** I made a formal request for a true signed agreement for the alleged account under consumer credit Act 1974 s77/8. A copy of which is enclosed for your perusal and ease of reference.

You have failed to comply with my request, and as such the account entered default on **DATE**.

 

The document that you are obliged to send me is a true copy of the executed agreement that contained all of the prescribed terms, all other required terms and statutory notices and was signed by both your company and myself as defined in section 61(1) of CCA 74 and subsequent Statutory Instruments. If the executed agreement contained any reference to any other document, you are also obliged to send me a copy of that document.In addition a full statement of this account should have been sent to me detailing all debits and credits to the account.

 

Furthermore

 

 

You are aware that the Consumer Credit Act allows 12 working days for a request for a true copy of a credit agreement to be carried out before your client enters into a default situation.

 

This limit has expired.

 

As you are no doubt aware section 77(6) states:

 

If the creditor fails to comply with Subsection (1)

 

(a) He is not entitled , while the default continues, to enforce the agreement.

 

Therefore this account has become unenforceable at law.

 

As you have Failed to comply with a lawful request for a true, signed copy of the said agreement and other relevant documents mentioned in it, Failed to send a full statement of the account and Failed to provide any of the documentation requested.

 

Consequentially any legal action you pursue will be averred as both UNLAWFUL and VEXATIOUS.

 

Furthermore I shall counterclaim that any such action constitutes unlawful harassment.

 

Please note you may also consider this letter as a statutory notice under section 10 of the Data Protection Act to cease processing any data in relation to this account with immediate effect.

 

This means you must remove all information regarding this account from your own internal records and from my records with any credit reference agencies.

 

Should you refuse to comply, you must within 21 days provide me with a detailed breakdown of your reasoning behind continuing to process my data.

 

It is not sufficient to simply state that you have a ‘legal right’; You must outline your reasoning in this matter and state upon which legislation this reasoning depends.

 

Should you not respond within 14 days I expect that this means you agree to remove all such data.

 

Furthermore you should be aware that a creditor is not permitted to take ANY

Action against an account whilst it remains in dispute.

 

The lack of a credit agreement is a very clear dispute and as such the following applies.

 

* You may not demand any payment on the account, nor am I obliged to offer any payment to you.

* You may not add further interest or any charges to the account.

* You may not pass the account to a third party.

* You may not register any information in respect of the account with any credit reference agency.

* You may not issue a default notice related to the account.

 

 

I reserve the right to report your actions to any such regulatory authorities as I see fit.

You have 14 days from receiving this letter to contact me with your intentions to resolve this matter which is now a formal complaint.

 

I would appreciate your due diligence in this matter.

 

I look forward to hearing from you in writing.

 

Yours faithfully

__________________

 

dx

[militantconsumer]

Thank you dx, but most of this letter applies to the situation where a creditor has failed to supply a copy agreement. Egg have supplied one, it's just that we think it can't be enforced.

 

We are well up for challenging it and not paying any more money.

 

But we just want to read something that tells us that Egg cannot issue a 2nd default on the account having already defaulted us once in 2005.

 

I can't find anything on this forum and although "don't worry" is helpful, it is ultimately not reassuring enough as we need to know where in the rules/guidance/codes this is enshrined.

[dx100uk]

ok

let tackle this another way

have you put scans of the agreement up on this site so the learned members can re-assure you or not that it is a true copy?

 

dx

[militantconsumer]

Yes, they are in the links in my post #5 above.

 

They are definitely true copies - that is not the issue. I'm also fairly certain that they are unenforceable due to lacking the prescribed terms - that is not the issue either.

 

The issue is very specific: can my friend be defaulted on the same account more than once?

 

Egg defaulted my friend on these accounts in 2005. Since that time she has been on a Debt Management Plan - these are informal arrangements which expire every six months.

 

If she stops paying (notwithstanding the likelihood of these accounts being unenforceable due to legal technicalities) can she be defaulted a second time on the same accounts, thus re-setting the 6 year clock?

 

There are a lot of things I understand in great detail as far as the CCA 1974 is concerned. What I do not understand is how defaults work, and I haven't been able to find any general information or guides on this.

[dx100uk]

sorry didn't look upwards...

 

the CCA is unenforceable!

they cannot default you.

 

but lets assume it is enforceable......

 

so thus, yes, they can default you as you have broken the DMP that they agreed to.

 

dx

[militantconsumer]

The 2005 DN was the legally required precursor for Egg to demand immediate repayment of the outstanding balance. I infer that since the DN issue Egg came to an informal arrangement of £x payment per month. It is this latter arrangement that is under consideration for stoppage from your side. This latter arrangement was private and did not have legal backing, and I cannot see Egg issuing a second legal DN for the same breach.

 

Although record of the formal 2005 DN will drop off CRA registers in 2011, there is likely to be lingering records since showing the last 36 months payments/non-payments, e.g. 33443344.... etc, is such showing on Experian? If so, then the informal black marks will linger past 2011.

 

 

sorry didn't look upwards...

 

the CCA is unenforceable!

they cannot default you.

 

but lets assume it is enforceable......

 

so thus, yes, they can default you as you have broken the DMP that they agreed to.

 

dx

 

 

Sorry to keep repeating myself, but here we have two contradictory opinions, and my friend does not want to take the risk of setting her credit rating back another 6 years.

 

Can Egg default the account in 2005 and then default it again in 2009 if she decides to stop paying?

 

For the avoidance of doubt, the informal arrangement will not be broken because it has to be renewed every six months anyway.

 

Is there any general guidance anywhere as to how defaults work???

[volvo]

In my opinion without an enforceable CCA agreement, the DCA/OC cannot pursue registering default with CCA agencies, as no express consent has been given without a valid CCA agreement.

 

If they persist, then a complaint to (ICO) Information Commissioners Office under Section 10 of the Data Protection Act would be the best course of action.

 

VOLVO

[Stornoway]

Sorry for being pessimistic but ;

1. the fact that the loan / card is unenforceable arguably doesnt stop them chasing you for the debt because it still exists so they will continue to write to you to look for the money. I have this problem with HSBC.

2. as the physical credit agreements do exist they may well try and take you to court and you are then you woud be trying to justify your position on some technicalities. You may be right in saying they are unenforceable but the judge might not be persuaded in which case you would have to appeal - unenforceable agreements are not as straightforward a process as some people make out.

3. even if there is no physical agreement (as is the case with me with HSBC and RBS) they may still refuse to remove the default and you are faced with taking them to court to ask for its removel - again not straightforward and lots of hassle.

[jonni2bad]

Make sure your friend gets copies of their credit files from all 3 agencies AND KEEPS THEM.

 

Should any DCA then proceed to update the records with incorrect information (i.e. detailing the wrong date) then you will have evidence of them acting unlawfully.

 

This is quite important for anyone dealing with delinquent debts, to be honest, since DCAs have a bad record in this respect.

[militantconsumer]

Thanks for your comments.

 

As the account was already defaulted back in 2005, can a new default be issued again on the same account? Or does that not generally happen?

 

I think we are going to have to accept the existing defaults but we could do with not having to worry about re-starting the 6 year clock.

[jonni2bad]

Not legally - but that doesn't mean it won't happen!

 

Some DCAs will routinely update a user's credit files when they take over an account and this shocking practice is allowed to happen because the credit reference agencies do not have stringent enough safeguards in place.

 

Keep all original Default Notices and get/keep copies of your CRA files once a year - or sooner if a debt is taken over!