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Can Interest be applied post Judgment/urgent advice needed


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Hi,

I need some advice for a elderly relative of mine, he has had a Judgment made against him after defaulting on a Log Book Loan (regulated by the 74 act).

 

The contract includes wording for Interest "before and after Judgment" this was also stated in the claim particulars supplied to court, but after Judgment he wasnt sent a "First required Notice" as laid down CCA 1974 130A, would this make a difference?

The Judgment does not specify timescale of payment or any reference to Interest.

Just states "Judgment for the claimant in the sum of........."

 

He has since paid all the monies of the Claim but when it was granted Judgment it had grown with Interest by another £14k.

He is now in a qaundry whether to try and get the rest of the money to satisfy the Judgment but if interest can be added after Judgment he has to find another £60k!

 

If interest can be added what route should he take? as he has not the money to pay.

 

My conflicting advice has been that the interest should only grow in a separate pot and not be confused with the Interest Post Judgment, and then very hard for them to bring a 2nd claim for the interest as the CPR rules make it difficult.

But then i am told yes Judgment can include the interest if sated in the contract. End of!

 

 

Sorry if i have repeated on another couple of Forums as i am getting conflicting advice and the arrangment freezing interest has just been removed, obviously trying to force my relative to pay, so it is now urgent.

 

Many Thanks

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Hi Flint and welcome to Cag

 

The general rule

 

2.—(1) Subject to the following provisions of this Order, every judgment debt under a relevant judgment shall, to the extent that it remains unsatisfied, carry interest under this Order from the date on which therelevant judgment was given.

(2) In the case of a judgment or order for the payment of a judgment debt, other than costs, the amount of which has to be determined at a later date, the judgment debt shall carry interest from that later date.

(3) Interest shall not be payable under this Order where the relevant judgment—

(a)is given in proceedings to recover money due under an agreementregulated by the Consumer Credit Act 1974(1);

Regards

Andy

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We could do with some help from you.

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Thanks, That looks straightforward enough.

 

How would the Claimant pursue the Interest.?

I am trying to get my head round, one thing being no Interest on the Judgment figure but is there still interest on the original debt?

 

Could my relative apply for a Time order based on the arrangement he had in place for the remaining £14k, would that then bring things to a head, am i correct that it would be difficult for the claimant to raise a second claim based on the first?

 

Thanks

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The important thing is to separate right to interest before and after judgment.

 

Pre-judgment, interest can be claimed from the date the monies were due until the date of judgment IF contractual interest was not being applied.

 

Post judgment, no statutory interest can be added to a CCA agreement IF contractual interest is accruing. Statutory interest CAN be added to any debt where contractual interest is not accruing providing the debt is more than £5000 and then interest can only be added to any missed instalment or if a forthwith judgment has been given until the date for payment has passed.

 

A County Court has no jurisdiction to apply contractual interest before or after judgment. Therefore any order to pay interest before or after judgment can only be referring to statutory interest.

 

With reference to charging orders, if statutory interest is granted on the judgment then it will continue to run on the charging order whether or not the judgment order says this. However post judgment contractual interest may continue to run on the debt but will not be ‘charged’ as it cannot form part of the judgment debt.

 

Please note however, that most creditors do consider any contractual interest to be charged on the property so if a client wanted to sell they would have to challenge this.

 

Some useful reading:-

 

Interest Charged after Judgement

 

 

Consumer Credit Act 1974 - Post-contract information requirements

 

http://www.nationaldebtline.co.uk/en...redit_judgment

Edited by Andyorch

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hi

the 'general rule' (that i presume you refer to) says that a judgment debt shall carry interest (statutory), except for cc act debt, below 5k etc.....

s74(3) says that interest due under s74(1) (ie the 91 Order) shall be enforceable.... ie if a judgment debt carries statutory interest as per the 91 order, then any such interest is enforceable under the judgment. ie they work together.

Edited by Ford
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you say that the loan is con cred act regulated. therefore, there should be no post judgment statutory interest (the 91 order (by virtue of s74(1) relates to statutory interest). post judgment contractual interest is different. if this is being applied then as you say it has to be in the agreement and there is s130A. and if they do not give required notice in any relevant period, then contract interest can't be applied for that period. as you say, some say it should be stated in the judgment. i dont think it has to be (see also s130A for eg). and would then be a 'separate pot' separately (unlike any applicable stat interest which would be under the judgment). also, generally, if post j contractual interest is to be applied then it should also be stated in the default notice (1993 def notice regs). what happened re the judgment? was it admitted, contested etc? also have a read of that HL case mentioned in the natdebtline link.

Edited by Ford
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Hmmm - isn't there a requirement to provide debtors with regular statements - minimum 1 every 6 months - came in as a change to the CCA1974 within the last 2 years. Not sure if this still applies with a CCJ in place - but if it does and no statements have been provided then a creditor cannot slam in a massive debit for contractual or any other interest - they cannot keep an 'invisible slate' on the side.

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yes, s130A re 'interest payable on judgment debts'! as previously mentioned :) . ie for eg no statement in a relevant period, then no contract interest for that period.

Edited by Ford
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Thanks.

The Judgment wasn't contested, the claim was, but he had buried his head in the sand so the lender held all the cards.

To his credit he has paid the original claim (£123k) that is just £14k short of the Judgment, i assume the difference is the 3 months delay up to Judgment which meant 3 months Interest!

One other point the Lender applied for a charge after Judgment which wasnt granted, but on the Court paperwork it does state an increase in the figure from the original Judgment "b) the Judgment now owing under the judgment or order is £147k (including any interest and costs)

The application was held at a later date and refused.

 

It is just the Interest post judgment that has grown like a monster!

 

Anyway even if the lender has failed to priovide the "Interest after Judgment"in his default notice (which actually was attached in the court bundle), would this not be a slight weak argument as it was stated in the original signed contract and in the "claim particulars"supplied by the lender in court.

 

If he sought a Time Order for the remaining £14k would he be informed whether it was assumed/or not to carry the Post Judgment Interest?

He rang the Court and asked and they couldn't tell him just advised him that "it depends what the contract said"!

Could he apply to Court to deal with the 2 issues Time Order and the Interest Post Judgment and then argue his points,

don't forget the lender has removed the arrangement so Interest is back accruing.

you say that the loan is con cred act regulated. therefore, there should be no post judgment statutory interest (the 91 order (by virtue of s74(1) relates to statutory interest). post judgment contractual interest is different. if this is being applied then as you say it has to be in the agreement and there is s130A. and if they do not give required notice in any relevant period, then contract interest can't be applied for that period. as you say, some say it should be stated in the judgment. i dont think it has to be (see also s130A for eg). and would then be a 'separate pot' separately (unlike any applicable stat interest which would be under the judgment). also, generally, if post j contractual interest is to be applied then it should also be stated in the default notice (1993 def notice regs). what happened re the judgment? was it admitted, contested etc? also have a read of that HL case mentioned in the natdebtline link.
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re my post #11. that should be 1983 def notice regs (not 1993) :)

 

 

ps, when was the agreement taken out?

Edited by Ford
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Borrowed separate amounts on 6 occasions.

First amount borrowed Sept 2007 last March 08

 

But looking at the Claim he has rolled up the figures and exhibited the final amount which already includes interest.(he didnt show the previous docs)

So it suggests that the "Advanced figure" is his lending without Interest but it is not.

re my post #11. that should be 1983 def notice regs (not 1993) :)

 

 

ps, when was the agreement taken out?

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you say 'rolled up the figures'. (an individual debt for over 25k prior to april 08 would not be con credit act 74 act regulated) so, how much was the actual judgment for then? and has this been paid, and 'he' is now paying the interest? is this contractual interest? have the required s130a notices been received?

Edited by Ford
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You are correct and we have requested the amounts borrowed(for some reason these are not forthcoming) without Interest/costs as i do not reach the same figure when i have tried to deduct the interest/charges from the borrowing amounts (also my relative is not 100% sure)

 

The lender in his Claim Statement states that the agreement is regulated by the 74 Act.

The Judgment was for £137k. He has paid £123k

From what i have found since he made a payment he has received a Arrears Notice s86B

 

Thanks

you say 'rolled up the figures'. (an individual debt for over 25k prior to april 08 would not be 74 act regulated) so, how much was the actual judgment for then? and has this been paid, and 'he' is now paying the interest? is this contractual interest? have the required s130a notices been received?
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As for the s130a notices, would this have to specify "Interest post Judgment", and be stated as a "Compliance under s130a.....", as he has had none if so, only a Statement and a Arrears Notice 86b CCA 74.

You are correct and we have requested the amounts borrowed(for some reason these are not forthcoming) without Interest/costs as i do not reach the same figure when i have tried to deduct the interest/charges from the borrowing amounts (also my relative is not 100% sure)

 

The lender in his Claim Statement states that the agreement is regulated by the 74 Act.

The Judgment was for £137k. He has paid £123k

From what i have found since he made a payment he has received a Arrears Notice s86B

 

Thanks

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Thanks for your input. Any views on the way forward?

you say 'rolled up the figures'. (an individual debt for over 25k prior to april 08 would not be con credit act 74 act regulated) so, how much was the actual judgment for then? and has this been paid, and 'he' is now paying the interest? is this contractual interest? have the required s130a notices been received?
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where it is statutory interest, then it would form part of the judgment and so 'enforceable' 'per se' (s74(3)). but, where it is contract interest then it would be 'separate' so if it wasn't paid then a claim would need to be made on that.

was their original claim 'rolled up'? if so, then that is not generally ok afaik?

a notice of arrears would not be sufficient unless it incorporates a s130a notice. there must be s130a notice(s).

anyway, way forward?

difficult to suggest (without full circumstances). he has already paid the judgment and now some of the interest? could consider:

just stop paying the interest and see what they do?

applying for a time order, and in doing so mention the default notice requirement and any lack of required s130a notice(s)?

doing either of the above, and then try and claim back any interest paid where there has been no required s130a notice(s)?

see what others say.

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Ford,

 

Dunno if you agree, but I see it as this.....

 

The actual FINAL judgement amount was 137k, paid so far 123k (op could confirm this)

 

Once the 137k is paid, the judgement is settled.

Any contractual interest they show owing in their own accounts, they would have to bring another separate action, as this does not form part of the judgement debt per se.

 

BUT, as the required notice of intent to charge post judgement interest was not on the dn and no notices have been given six monthly - they can't charge it.

 

I would therefore suggest, that if they tried for a separate claim for the post judgement interest, they won't get it and the claim would be thrown out / dismissed

 

What do you think?

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oh ok. (i had thought from flintstones comments (following my post #17, which he said was correct) that 'he' was currently paying the interest, having already paid the judgment. as the figures were 'rolled up'!)

 

thanks for that. :)

Edited by Ford
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It is confusing?

 

I think what they are saying is that the original debt was 123k, but the contractual PRE judgement interest brought it to 137k.

They are ok with the pre judgement interest, they can get that as it has been included in the judgement figure (and was allowable) so it would appear that the judgement figure of 137k is correct (op??) - what was the judgement figure on the CCJ??

 

Post judgement though, I can't see how a claim could succeed, as they have followed none of the protocols which would allow them to be able to charge it, let alone claim it back.

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Thanks for the comments.

Yes you are correct, we are ok with the £137k and are just £14k short of paying the CCJ £137k

 

My main concern is Interest is now running again (stands at £70k plus on top of the £137k) so i need to advise to bring to a head either way.

Thanks

It is confusing?

 

I think what they are saying is that the original debt was 123k, but the contractual PRE judgement interest brought it to 137k.

They are ok with the pre judgement interest, they can get that as it has been included in the judgement figure (and was allowable) so it would appear that the judgement figure of 137k is correct (op??) - what was the judgement figure on the CCJ??

 

Post judgement though, I can't see how a claim could succeed, as they have followed none of the protocols which would allow them to be able to charge it, let alone claim it back.

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