Invalid Default Notices

[haggis1984]

Hi Haggis

 

This happened to me, in that MBNA sold my Account to CL Finance 4 days before the remedy date.

The Notice of asignment was dated 4 days before the remedy day, also the Court papers that was submitted stated the date that the account was taken over.

So all in all they made a big B........up in asigning the account.

 

Gaz

 

Have you got a thread for this Gaz? Would be great to have a read

[haggis1984]

If the account was sold in it's entirety as an absolute assignment then I believe this would represent an unlawful rescission as they sold all rights to the third party, thus effectually demanding the full balance before you had exhausted the time to remedy the law says you must have.

 

On the other hand, if the assignment was just equitable and the DCA was merely being 'prepped' in the background for the expectation of you not providing remedy I suspect it would be overlooked as technically the creditor still has control over the account and hasn't demanded the full balance.

 

However, with the above scenario if you had actually received a letter demanding the full balance from a DCA before the time had expired on the default sent by the original creditor then I believe that would be an unlawful rescission as again, you have not been given the full time the law says you must have.

 

There is a difference between an unlawful repudiation and an unlawful rescission as well, something I am also getting my head round.

 

In order to be able to accept the creditors unlawful rescission/repudiation you either need to have an invalid default notice which they subsequently terminate on with a letter demanding the full balance or..

 

A correct/invalid default notice that they then don't allow you to act on by prematurely demanding the full balance before the remedy date on the default notice, either themselves, or via a DCA.

 

Think that's about the jist of it all. What's critical primarily is the validity of the default notice and secondary the termination letter sent on the back of that default notice.

 

If a creditor therefore merely sends an invalid default notice it is of little value in itself unless the termination follows. The creditor can merely re-issue the default, this time corrected.

 

The termination and how/when it's done is the actual 'icing on the cake'.

 

The letter says that the debt has been sold to Lowell and all enquiries should be made to them.

 

Im unsure if this is an equitable or absolute assignment. How would I find out?

[nks22]

Lowell would have no right to the debt without having received a Notice of Assignment from the original creditor. I'm not sure if there's any requirement to send a copy to the debtor but presumably it would show up with a SAR.

[emandcole]

The letter says that the debt has been sold to Lowell and all enquiries should be made to them.

 

Im unsure if this is an equitable or absolute assignment. How would I find out?

 

If the debt truly has been sold to them it's an absolute assignment.

 

An equitable assignment relates to the original creditor asking a third party (DCA) to collect the debt. The DCA merely has a right to get involved and can't for example issue litigation in their own name. Any litigation they start would have to name both the original creditor and the DCA as co-claimants to the action.

 

This is something many DCA's/creditors forget when they start litigation and gives you the opportunity to question the right of the DCA to actually start action in their own name if they merely have the right to collect.

 

In such eventuality I suspect this would be a complete defence in itself under their 'right to action'.

[diddydicky]

question.

 

when a default notice is issued and the 14 days has ran out to rectify the breach, is there a time limit before they can terminate the agreement due to the breach. i have seen somewhere??? that when a default is not fulfilled by the 14th day they have to give it 1 clear month or x amount of days before they can terminate.

 

cab

 

dont think so- they can do it when they like

 

although if the DN says we WILL terminate on or after 14 days then you can take them at their word and assume that after 14 days the agreement is terminated

 

there is also argument that even the word MAy terminate in the DN is sufficient although i wouldnt like to push that one myself

[diddydicky]

If the account was sold in it's entirety as an absolute assignment then I believe this would represent an unlawful rescission as they sold all rights to the third party, thus effectually demanding the full balance before you had exhausted the time to remedy the law says you must have.

 

On the other hand, if the assignment was just equitable and the DCA was merely being 'prepped' in the background for the expectation of you not providing remedy I suspect it would be overlooked as technically the creditor still has control over the account and hasn't demanded the full balance.

 

However, with the above scenario if you had actually received a letter demanding the full balance from a DCA before the time had expired on the default sent by the original creditor then I believe that would be an unlawful rescission as again, you have not been given the full time the law says you must have.

 

There is a difference between an unlawful repudiation and an unlawful rescission as well, something I am also getting my head round.

 

In order to be able to accept the creditors unlawful rescission/repudiation you either need to have an invalid default notice which they subsequently terminate on with a letter demanding the full balance or..

 

A correct/invalid default notice that they then don't allow you to act on by prematurely demanding the full balance before the remedy date on the default notice, either themselves, or via a DCA.

 

Think that's about the jist of it all. What's critical primarily is the validity of the default notice and secondary the termination letter sent on the back of that default notice.

 

If a creditor therefore merely sends an invalid default notice it is of little value in itself unless the termination follows. The creditor can merely re-issue the default, this time corrected.

 

The termination and how/when it's done is the actual 'icing on the cake'.

 

as a layman you can use the word unlawful termination or rescission or repudiation you are not expected to be sufficiently knowledgeable to know the finest distinctions

 

so long as the essence of your response is that you have accepted their unlwaful act it is fine

[haggis1984]

So ddicky would you sat that absolute assignment = termination?

[diddydicky]

assignments are not my strong point - i havn't had any yet so not bothered to gen up on them so cant give you an answer on that one

 

you need to look around the threads

 

search on "assignments"

[haggis1984]

assignments are not my strong point - i havn't had any yet so not bothered to gen up on them so cant give you an answer on that one

 

you need to look around the threads

 

search on "assignments"

 

I know the feeling - thats why I didn't learn anything about defaults until now. Its such boring reading it doesnt sink in unless i really need to know it.

[Pinky69]

There are two types of assignment, equitable and absolute. Equitable assignment is where the creditor confers the duties but not the rights of the agreement to a third party ie collection. Absolute assignment confers both the rights and duties to a third party ie sale. So absolute assignment is termination.

[diddydicky]

There are two types of assignment, equitable and absolute. Equitable assignment is where the creditor confers the duties but not the rights of the agreement to a third party ie collection. Absolute assignment confers both the rights and duties to a third party ie sale. So absolute assignment is termination.

 

got that bit

 

but why if the whole debt is sold lock stock and barrel does the agreement terminate?

 

surely the new owner of the debt takes on all its rights and responsibilities?

 

debt "books" are bought and sold almost on a daily basis

 

I had a mortgage that got sold from the OC to another bank- it did not terminate the mortgage?

[vint1954]

got that bit

 

but why if the whole debt is sold lock stock and barrel does the agreement terminate?

 

surely the new owner of the debt takes on all its rights and responsibilities?

 

debt "books" are bought and sold almost on a daily basis

 

I had a mortgage that got sold from the OC to another bank- it did not terminate the mortgage?

I assume that is due to the fact that they carried on with your agreement, making monthly payments and accepting the terms of the Mortgage.

[the_shadow]

got that bit

 

but why if the whole debt is sold lock stock and barrel does the agreement terminate?

 

surely the new owner of the debt takes on all its rights and responsibilities?

 

debt "books" are bought and sold almost on a daily basis

 

I had a mortgage that got sold from the OC to another bank- it did not terminate the mortgage?

 

Think its due to the DCA's not holding consumer credit licences and therefore unable to perform the same duties as the original lender...

 

So if a bank sells it card business to another bank it can continue to function as a credit card under the new bank ala MSDW - Goldfish - Barclays...

 

whereas if MSDW sells to a DCA all they can do is recover the money, they cant provide you with credit to buy anything and hence the agreement has been terminated...

 

Thats my simple view on it anyway

 

S.

[nks22]

Thats my simple view on it anyway

 

Sounds plausible. The DCA is buying a debt rather than a credit agreement.

[cab1ne]

Notice of Assignment

To create the notice required when a contract has been assigned. You must give notice to the other contracting party of the assignment. Without this notice, they are under no obligation to pay you (the person to whom the contract is assigned) and could continue to pay the person whom they first signed the contract with. You would not be able to claim any of the money Assignment. Transfer of ownership of a property, or of benefits, interests, liabilities, rights under a contract (such as an insurance policy), by one party (the assignor) to another (the assignee)

 

Deed of assignment

1. Agreement under which some or all assets of an insolvent debtor are assigned to a trustee, for selling them and distributing the sale proceeds equitably among the creditors.

 

2. assigment of a part of the proceeds of a letter of credit by its beneficiary (usually an exporter or seller) to the manufacturer or producer (of the goods being exported or sold) as a guarantee of payment for those goods. Also called Letter Of Assignment.

 

Absolute assignment

assignment in which all (and not merely a portion of) benefits, liabilities, and/or rights are transferred by one party to another, without any pre-condition.

 

Collateral assignment

asset assignment in which ownership rights are transferred only as an additional security for a loan, and revert to the assignor when the loan is repaid.

 

Equitable assignment

assignment which does not fulfill the statutory criteria for a legal assignment An equitable assignment may be made in one of two ways:

 

1. The assignor can inform the assignee that he transfers a right or rights to him.

 

2. The assignor can instruct the other party or parties to the agreement to discharge their obligation to the assignee instead of the assignor.

Only the benefit of an agreement may be assigned.There is no requirement for written notice to be given or received. The only significant difference between a legal assignment and an equitable assignment is that an equitable assignee often cannot bring an action in its own name against the third party contractor, but must fall back on the rules governing equitable assignments and join the assignor as party to the action.

cab

[avatari]

cab, useful post thanks : a succinct and cogent explanation of assignments - where was this info from, as am assuming it was c+p?

[haggis1984]

Great stuff here.

 

So what would constitute a notice of assignement?

 

For example MBNA have written a simple letter stating that the account has been sold to Lowell and any enquiries should now be directed to them. Does this suffice?

 

Do Lowell also have to provide a notice of assignment before commencing collection action?

[Pinky69]

The Notice of Assignment comes from the the creditor. It is supposed to be delivered by Recorded delivery but it never is. All the DCA has to send you is a letter telling you they have bee assigned the debt.

[AA99]

The Notice of Assignment comes from the the creditor. It is supposed to be delivered by Recorded delivery but it never is. All the DCA has to send you is a letter telling you they have bee assigned the debt.

 

Or, as in one of my accounts, the Notice of Assignment is sent together with the Notice of Acquiring (whatever it's called!) by the new DCA. Written on the OC's letterhead, not even signed off, and both the letters in the same envelope from the DCA

[cab1ne]

cab, useful post thanks : a succinct and cogent explanation of assignments - where was this info from, as am assuming it was c+p?

 

about 2 hours of google

 

cab

[diddydicky]

Think its due to the DCA's not holding consumer credit licences and therefore unable to perform the same duties as the original lender...

 

So if a bank sells it card business to another bank it can continue to function as a credit card under the new bank ala MSDW - Goldfish - Barclays...

 

whereas if MSDW sells to a DCA all they can do is recover the money, they cant provide you with credit to buy anything and hence the agreement has been terminated...

 

Thats my simple view on it anyway

 

S.

 

thanks yes, i remember that part- and that is understood- that would be a clear unlawful termination on the part of the OC

 

but is it not the case that many assignees do hold a CCl and can service the agreement,

[patrickq1]

got that bit

 

but why if the whole debt is sold lock stock and barrel does the agreement terminate?

 

surely the new owner of the debt takes on all its rights and responsibilities?

 

debt "books" are bought and sold almost on a daily basis

 

I had a mortgage that got sold from the OC to another bank- it did not terminate the mortgage?

listening to that arguement it seems HFO CAPITAL want both they purport to have absolute when they send you that fake document supposed to be from the bank then when that fails they then go back to court if they get chance asking for equitable ,,but they are a company registered abroad and i am argueing with the CRA'S but they will not remove the default from HFO ggrr mind you i aint acted on it apart from sending experian a letter warning them i shall hold them jointly liable for entering a default that is not altogether legal as it stands it is now costing me an extra 102.00 per month because i got refused a further advance from my bank because of it i did not know hfo had registered it ...i gotta start making plans of attack...sorry to but in guys..

[emandcole]

The Notice of Assignment comes from the the creditor. It is supposed to be delivered by Recorded delivery but it never is. All the DCA has to send you is a letter telling you they have bee assigned the debt.

 

Thanks Pinky, is this a credible defence or just another issue the courts choose to overlook?

 

On the off-chance does anyone know if this information can be found in the Consumer Credit Act under assignments or similar? Would have a look myself but can't get round to that until later on .

[the_shadow]

Thanks Pinky, is this a credible defence or just another issue the courts choose to overlook?

 

On the off-chance does anyone know if this information can be found in the Consumer Credit Act under assignments or similar? Would have a look myself but can't get round to that until later on .

 

Assignments are dealt with under section 136 of the Law of Property Act 1925 (I know, sounds crazy)

 

S.

[Bill Shidding]

Would I be right in thinking that if an agreement is still "alive" the borrower needs to agree to the assignment?

If that is the case, then could it be extrapolated from that, that if the borrower is not "invited" to agree to the assignment, then the agreement is terminated?