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Debt collection time scale


bazzae
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I missed a payment on 1st August 2010, 21 days ago. It is already at the stage of a debt collecting company sending me a final demand letter.

 

Are there timescales to when a debt becomes a debt so to speak.

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I don't think there are any timescaes as such but a lot of larger companies do have their own in house debt collectors that give the impression things have got worse very quick.

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They become a debt once you have not met the payment date.

 

What are the payments for?

 

What letters have you received before the final demand letter?

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I own a franchise and the payment is the monthly management fee although they do absolutely nothing for the fee. I've had a "you have missed your payment and pay within 7 days letter" but stupidly I thought I would have had another letter or 2 before being put in the hands of somebody else.

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I own a franchise and the payment is the monthly management fee although they do absolutely nothing for the fee. I've had a "you have missed your payment and pay within 7 days letter" but stupidly I thought I would have had another letter or 2 before being put in the hands of somebody else.

 

What these companies often do, is have a standard letter with a debt collection agencies details listed on it. If you continued not to pay, they then pass on the details to the debt company to continue the collection activity.

 

What you need to do before you stop payments is to enter into a contract dispute with the franchise company. Write to them a full letter explaining why you feel that they have breached the contract and give them the opportunity to fully comply with the contract. If they fail to do this, then write a follow up letter, giving them notice that you will be ending payment. Send by recorded delivery. By doing this, you then have some proof that you had tried to resolve the contract problems, before you ended payment. This could be useful if they ever took this matter to court.

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It has also been discovered that the loan this particular franchisor provided for the purchase of the franchise is unenforceable due to various failings to follow the correct procedure and they are being investigated by OFT. I have heard that the franchise agreement would then mean nothing as it was payed for with the unenforceable loan provided by them.

 

I settled that loan with another loan from my bank as it was lower interest after 2 months. Is my franchise agreement possibley void because I originally payed for it with the unenforceable loan or not as I have settled that loan in full.

 

I have tried to get information from my local OFT but I've been told they don't deal with businesses so I'm struggling to find out facts on my situation. Other franchisees are being helped by their local OFT but they didn't settle the loan.

 

I hope someone can give me a little advice.

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You would need to take this up with the original loan company. They would have been involved in the franchise contract with you, so if there is a breach in the contract, you could get the loan company involved.

 

I don't think the fact that you have paid the original loan off now is relevant. The original loan company could still have legal responsibility to assist you. The argument being that you would not have entered into the franchise arrangement without the original loan.

 

So my advice stands, you need to write to the franchise company advising them that you consider that they have breached the contract and that they must rectify these breaches. You must detail the breaches in full, referring back to the contract. If you do not want to reinstate payments, just state that you are currently withholding payment until such times as the breaches in contract have been remedied. Important, send by recorded delivery.

 

Depending on the amount involved, you might want to instruct a solicitor to help you, as it might help you resolve the matter quicker. Speak to a local solicitor that can handle this type of issue.

We could do with some help from you.

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Thank you I think I may well do.

 

No other loan company was involved. The franchisor was providing the loan or basically letting you pay for the initial franchise fee by installments with interest of course but they described it as a loan. The loan agreement had nothing more than the interest rate, monthly payment amount, and term length with just my signature alone. No other terms and conditions were provided and apparently their credit licence was still in the address of their old premises.

 

Since signing up we have all found that many other lies were told to us before we signed up, like giving the impession they were members of certain groups and using their logos when they weren't.

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Put this in the hands of a solicitor, who will hopefully write to these people to tell them to get lost. They might even suggest taking action to recover any payments made.

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Erm, can I go back to basics a moment.

 

Have I got this correct:

 

1. You had a loan with what now be an unenforceable Agreement.

2. After 2 months' you settled/Paid in full this first Agreement.

3. You have now received a letter saying you have missed a payment on the original loan?

 

So this actually has nothing to do with the original Agreement - This is actually a payment on another Agreement for the Monthly Management Fee. What documents do you have in connection with this Fee? These are the important documents surely?

Every journey begins with a single step :):)

 

Please note: I have no qualifications in this area - my advice is learned from the wonderful members of this Forum. Thanks to you all for your help.

 

If you have found my post helpful please leave a short message by clicking the star to the left of my profile - Thank You

 

The only person entitled to your Personal Finance details is a Judge not a DCA

 

Move all banking activity to another banking group if you have a dispute - your funds can be used to offset debts within the same group.

Be careful with Banking details (card/account numbers) as these can be used to take unauthorised payments.

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The original loan was provided by the franchisor for the purchase of the franchise.

 

I settled the above with a loan from my bank.

 

The management fee is a fee paid to the franchisor every month as part of the franchise agreement. It is a 5 year contract.

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OK so they terms of the original agreement are necessary only in that they cover the monthly fee. How long ago was this signed. You would need to read the conditions covering this part of the Agreement.

Every journey begins with a single step :):)

 

Please note: I have no qualifications in this area - my advice is learned from the wonderful members of this Forum. Thanks to you all for your help.

 

If you have found my post helpful please leave a short message by clicking the star to the left of my profile - Thank You

 

The only person entitled to your Personal Finance details is a Judge not a DCA

 

Move all banking activity to another banking group if you have a dispute - your funds can be used to offset debts within the same group.

Be careful with Banking details (card/account numbers) as these can be used to take unauthorised payments.

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The original loan was to buy the franchise but this loan is unenforceable, paid in full with a loan from my bank.

 

The franchise agreement/contract is for the franchise I bought with the original loan.

 

The franchise contract is probably water tight but I signed this contract after purchasing it with the original, unenforceable loan.

 

My aim would be to escape the contract and trade independently, thus saving me the management fee I pay each month and to buy my stock from other, cheaper suppliers.

 

I believe it is called linked association, as I used the unenforceable loan to purchase the franchise.

 

 

Hope I'm explaining this correctly. I know what I'm trying to say!

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Hence why I suggested that you see a solicitor. Far too complicated for a forum like this.

 

I would not know where to start in making the argument, apart from I would write a formal complaint to the franchise company, stating what breaches in contract I thought existed. If they have breached the contract, it could be considered null and void.

We could do with some help from you.

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 Have we helped you ...?         Please Donate button to the Consumer Action Group

 

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