The intended meaning of S87(1)(b)

[diddydicky]

No perhaps it would be clearer to you if i said the creditor could only issue a, default temination, on the breach of the debtor.

A contractural termination can be issued at any time even when the agreementis in breach.

Or perhaps being in breach does not preclude the crediotors option of issuing a contractural termination.

 

Peter

 

very well, taking your argument at face value - the creditor can contractually terminate at any time and even if the debtor is in breach.......and so your opinion therefore as to why s87 is in the act at all (if it can be bypassed) is what?

 

CAN- not cannot (just corrected it)

Edited March 14, 2011 by diddydicky

[Peterbard]

yes,that is better put and explains the error in your first post

 

we are just going to have to agree to disagree on this one

 

i am always going to advise that a creditor cannot simply avoid his s87 route to termination in the event of a debtor breach- and no doubt you are going to argue the opposite

 

so for the sake of caggers reading the thread- they have two different opinions and in order not to bore them to death- they can choose which advice they prefer!! agreed?

 

Nope no error

I am not saying anyone can avoid the 87 route if they wish to enforce after breach.

I am saying that enforcement can be made for other reasons than breach as we have seen.

And the creditors contractural termination can facilitate this as indeed can the debtors.

As for choosing which advice they prefer i thnk it is more a matter of which advise is factual.

 

Peter

[Peterbard]

very well, taking your argument at face value - the creditor cannot contractually terminate at any time and even if the debtor is in breach.......and so your opinion therefore as to why s87 is in the act at all (if it can be bypassed) is what?

 

When did i say any of this?

[diddydicky]

Nope no error

I am not saying anyone can avoid the 87 route if they wish to enforce after breach.

I am saying that enforcement can be made for other reasons than breach as we have seen.

And the creditors contractural termination can facilitate this as indeed can the debtors.

As for choosing which advice they prefer i thnk it is more a matter of which advise is factual.

 

Peter

 

i really am sorry but look at the two statements you just made

 

1/ A contractural termination can be issued at any time even when the agreement is in breach

 

2/ I am not saying anyone can avoid the 87 route if they wish to enforce after breach

 

 

i think i need to take a couple of mogadons and have a lie down- my brain hurts!

Edited March 14, 2011 by diddydicky

[diddydicky]

When did i say any of this?

 

replace the word cannot with CAN (sorry)

 

so taking the corrected word into account

 

i still would like to hear your view- if you believe that a creditor can bypass s87 by using another route to terminate a debtorwho is in breach............ your view as to why s87 is in the act-

Edited March 14, 2011 by diddydicky

[Peterbard]

i really am sorry but look at the two statements you just made

 

1/ A contractural termination can be issued at any time even when the agreementis in breach

 

2/ I am not saying anyone can avoid the 87 route if they wish to enforce after breach

 

 

i think i need to take a couple of mogadons and have a lie down- my brain hurts!

 

I dont se why you have so much trouble with this.

Section 87 is a route to enforcement following a breach of the act part of that route is the default termiknation. A default termination can only exist after an effective default notice.

If an ineffective default notice is issued there is nothing to stop the creditor from issuing a contractural termination. He would not be able to enforce due to the breach because that would require a termination after a valid defaiult.

 

The temination of the agreement is what makses all liabilities under the agreement due and payable but it is the default that enables the enforcement.

 

Not complicated

Peter

[Peterbard]

replace the word cannot with CAN (sorry)

 

so taking the corrected word into account

 

i still would like to hear your view- if you believe that a creditor can bypass s87 by using another route to terminate a debtorwho is in breach............ your view as to why s87 is in the act-

 

 

Yes see above it cannot be bypasse the ability to terminate does not mean that the section is bypassed,A valid default is reauired to enforce this cannot be by passed.

Peter

[diddydicky]

I dont se why you have so much trouble with this.

Section 87 is a route to enforcement following a breach of the act part of that route is the default termiknation. A default termination can only exist after an effective default notice.

If an ineffective default notice is issued there is nothing to stop the creditor from issuing a contractural termination. He would not be able to enforce due to the breach because that would require a termination after a valid defaiult.

 

The temination of the agreement is what makses all liabilities under the agreement due and payable but it is the default that enables the enforcement.

 

Not complicated

Peter

 

so, you confirm the view that despite failing to comply with s87 (the creditor serves an invalid or BAD) DN- he can then terminate under a term in the agreement?

 

therefore- it must be the case that if an invalid DN is of no obstacle to the creditor- then there is no reason why he should serve a DN at all- for there is no difference between no DN and an invalid one

 

so in either case (no DN or a BAD DN) that brings us back to your belief that a creditor can by pass his s87 responsibilities and terminate under a clause in the agreement - even though the debtor is in default and the creditor has not followed the requirements of s87

 

so again i ask- in your opinion- why is s87/8/9 even contained in the act- since you maintain that they are easily by passed (in your opinion)

[diddydicky]

Yes see above it cannot be bypasse the ability to terminate does not mean that the section is bypassed,A valid default is reauired to enforce this cannot be by passed.

Peter

 

so you are saying then that the creditor can (remember we are talking ONLY about a debtor in default) terminate under a clause in the agreement ..... but then needs to serve a valid DN to enforce?

[vjohn82]

...effectively reinstating a portion of the agreement that they have already terminated thus invoking the fiction that the agreement endured.

 

Doesn't sound logical.

 

However, if an agreement was terminated why do creditors have a duty to supply information under s.78 if such an agreement is no longer in effect? Surely a creditor is not bound by such an action UNLESS the Consumer Credit Act 1974/2006 is for the protection of consumer interests.

 

Which it is.

[Peterbard]

so, you confirm the view that despite failing to comply with s87 (the creditor serves an invalid or BAD) DN- he can then terminate under a term in the agreement?

 

therefore- it must be the case that if an invalid DN is of no obstacle to the creditor- then there is no reason why he should serve a DN at all- for there is no difference between no DN and an invalid one

 

so in either case (no DN or a BAD DN) that brings us back to your belief that a creditor can by pass his s87 responsibilities and terminate under a clause in the agreement - even though the debtor is in default and the creditor has not followed the requirements of s87

 

so again i ask- in your opinion- why is s87/8/9 even contained in the act- since you maintain that they are easily by passed (in your opinion)

 

Termination does not equal enforcement

 

Terminations can be made at any time there needs to be a reason for an enforcement wether it be breach or some other.

 

Issuing a termination does not byp[aww anything, it is not the termioantion that enables enforcement it is the breach.

 

PHeew

[diddydicky]

Termination does not equal enforcement

 

Terminations can be made at any time there needs to be a reason for an enforcement wether it be breach or some other.

 

Issuing a termination does not byp[aww anything, it is not the termioantion that enables enforcement it is the breach.

 

PHeew

 

right, so a debtor breaches and the creditor terminates under some other clause in the agreement-- if he takes the debtor to court to enforce- what does he use in his POC to support his case

 

1/ His right to terminate under a clause in the agreement

 

or

 

2/ The default (missed 4 payments) of the debtor?

[gh2008]

 

 

A lot of poo

 

 

Peter

 

Your contributions to answering a pretty simple question astound me as ever .....

 

I take it, from the noise of the thread that you don't actually have an answer .....

other than trying to persuade everyone that 'by Peter'sLaw' by not paying contractually agreed instalment they are not in breach of the contract

hmmmm

[Peterbard]

right, so a debtor breaches and the creditor terminates under some other clause in the agreement-- if he takes the debtor to court to enforce- what does he use in his POC to support his case

 

1/ His right to terminate under a clause in the agreement

 

or

 

2/ The default (missed 4 payments) of the debtor?

 

He wouldnt if the enforcement was due to breach of the debtor he would need to issue a secion 87 notice.

He could terminate first undner a conrtractural breach but he would not be able to enforce because of the statutory requirements of the act . I think this is what happend in Woodchester Brandon many others cant see your point.

Peter

[diddydicky]

why have you suddenly switched to using the word "enforcement" instead of termination- we are not at the "enforcement" stage yet

 

you have stated quite clearly that the creditor can - if he wishes contractually terminate the agreement even if the debtor is in breachr

 

so please follow the logical question i have posed

 

IF THE CREDITOR DOES terminate the agreement under a clause in the agreement AFTER the debtor has terminated (instead of via s87)

 

What does the creditor use in his POC- the fact that he is entitled to terminate under a term in the agreement OR that the debtor defaulted?

 

YOU raised the possibilty that the creditor could act in this way so it is incumbent upon you to say what the creditor would use as his cause of action.

[diddydicky]

gone quiet then!

[diddydicky]

ok for those watching the debate i will disclose where i was trying to lead the conversation to:-

 

1/ If the creditor terminates after a breach by the debtor- and then attempts to serve a DN (which he would have to do if he were to rely on the debtors breach in his POC), then the DN would necessarily be invalid as soon as the creditor wrote it- since the DN 's prescribed text is predicated on the agreement to which it is being served- being a live and enduring agreement- which of course it could not be if the creditor has already terminated it (for whatever reason), thus the recipient could not comply with it and obtain the benefit of s89 for doing so

 

the creditor could hardly set a deadline for terminating the agreement within a DN - which if the debtor fails to remedy by the stated date gives the creditor the right to terminate............when the creditor already terminated before he served the DN

 

2/ If the creditor, in seeking to be sly, and obtain a termination without using s87 and ignoring the fact of the debtors breach- then terminates by way of a clause in the agreement which entitles him to-terminate any time he likes- without mention of any breach by the debtor then, regardless of any argument as to whether such a term would be unfair- the debtor would need only to show a court (IMO) that he had breached before the creditors termination (for no apparent reason)- and that the true intent of the creditor was to circumvent the provisions of s87

 

3/ similarly, a creditor who serves an invalid DN (or none at all) and declares that under s87 he will terminate/do those things which s87 entitles him to do- and then seeks to "switch" the reason for the termination to a contractual termination in order to get him out of his mess- will (IMO) before a judge with half an ounce of common sense- get short shrift.

 

The current thinking is that a creditor is ruled not to have terminated where he has failed to serve a DN (or has served an invalid DN) even though he claims he has terminated- and even though he may be unaware- for quite some time- that he has not actually terminated

 

By the same token therefore it must be as sure as hell that the same ruling would be applied (IMO) to any termination by the creditor - following a breach by the debtor- who was clearly trying to circumvent s87

 

I understand that others may say - "ah but he may terminate if and when he feels like it - - but then concede that he cannot legally enforce" -(or worse KNOW that he cannot legally enforce- but omit to mention that important bit)

 

To me (and i suggest most caggers) such a statment is a total irrelevance-and distraction since i doubt that many caggers would be interested in what the creditor could "threaten to do- without authority" - and are more interested in what a creditor could do and which he could "legally enforce"

 

This is absolutely nothing to do with attempting to avoid debt- but merely establishing that if the creditor terminates an agreement- when the debtor has done nothing wrong-

whether by mistake or deliberately- then the creditor at the very least- cannot expect the debtor to pay for the creditors own mistake

 

nor can he demand immediate repayment of sums that otherwise would not yet have been due, in front of a judge who has his brain in gear- since the judge would in these circumstances (IMO) hold not only that the creditor was trying to circumvent the provisions of the act which protect the consumer - but to penalise or prejudice the debtor for actions or words the debtor may have wrongly used in response to being misled by the creditors words or deeds and which would never have occurred but for the creditors mistakes

 

To attempt to hold the debtor accountable for technical mistakes in his response to an unlawful or misleading act or statement by a creditor- is about as perverse as one could imagine

 

The CCA was CLEARLY drafted based on the proposition that the debtor is likely to be unsophisticated and confused by the technicalities of both the meaning of the terms and conditions of a credit agreement and the regulations surrounding the CCA and therefore needs "protection" from unscrupulous lenders

 

so what could be more unscrupulous than a creditor writing invalid and misleading DN's to a debtor, terminating agreements he is not allowed to terminate- and then using the debtors response as a technicality for getting his way- this is the VERY thing the act was drafted to prevent

 

 

 

IMO

Edited March 15, 2011 by diddydicky

[Peterbard]

why have you suddenly switched to using the word "enforcement" instead of termination- we are not at the "enforcement" stage yet

 

Default termination is part of the enforement process

 

you have stated quite clearly that the creditor can - if he wishes contractually terminate the agreement even if the debtor is in breachr

 

so please follow the logical question i have posed

 

IF THE CREDITOR DOES terminate the agreement under a clause in the agreement AFTER the debtor has terminated (instead of via s87)

 

Sorry i cannot make sense of this .How can a creditotr terminate an account that is already termianted by the debtor?

 

What does the creditor use in his POC- the fact that he is entitled to terminate under a term in the agreement OR that the debtor defaulted?

 

It depends on why the creditor chose to terminate, it could be a term of the asgreement that entitles the crediitor to bypass the section.

But usually the creditor would not enforce under this kind of termination ,certainly not on breach.

HOwever if the debtor chose to terminate he would have no option niether would the court.

 

Peter

YOU raised the possibilty that the creditor could act in this way so it is incumbent upon you to say what the creditor would use as his cause of action.

 

You are asking me how a crediotr could enforce under a contractural termination.

Well it is not really relevant to tis disscuson in the case of default he couldnt.

The creditor could include any requirement in the contract and as a result of breach of that requirement terminate and enforce their is othiung in the act that says he cannot.

in fact their is a section that says he can

sectoin88 ©.

 

Peter

[PriorityOne]

 

3/ similarly, a creditor who serves an invalid DN (or none at all) and declares that under s87 he will terminate/do those things which s87 entitles him to do- and then seeks to "switch" the reason for the termination to a contractual termination in order to get him out of his mess- will (IMO) before a judge with half an ounce of common sense- get short shrift.

 

 

You are asking me how a crediotr could enforce under a contractural termination.

Well it is not really relevant to tis disscuson in the case of default he couldnt.

 

DD made a statement; he did not ask a question (see above).... and you seem to have answered it anyway.

 

[vjohn82]

Very well put DD.

[Peterbard]

ok for those watching the debate i will disclose where i was trying to lead the conversation to:-

 

1/ If the creditor terminates after a breach by the debtor- and then attempts to serve a DN (which he would have to do if he were to rely on the debtors breach in his POC), then the DN would necessarily be invalid as soon as the creditor wrote it- since the DN 's prescribed text is predicated on the agreement to which it is being served- being a live and enduring agreement- which of course it could not be if the creditor has already terminated it (for whatever reason), thus the recipient could not comply with it and obtain the benefit of s89 for doing so

 

This is untrue.

There is no requirement for the agreement to be "live" as you put it before a default notice is served. Section 87 just says a regulated agreement,it does not say "under an agreement "or an "unterminated agreement". DNs are regularrilly nissued by assignees who have a terminated account assigned to them.

 

The creditor could hardly set a deadline for terminating the agreement within a DN - which if the debtor fails to remedy by the stated date gives the creditor the right to terminate............when the creditor already terminated before he served the DN

 

Section 89 does not say the agreement must be unterminated, merely that as far as this section of the act the breach never happened. Moreover it may be that no remedy is possible so the amount to be paid would only prohibit further enforcement,which is usualy the case

 

2/ If the creditor, in seeking to be sly, and obtain a termination without using s87 and ignoring the fact of the debtors breach- then terminates by way of a clause in the agreement which entitles him to-terminate any time he likes- without mention of any breach by the debtor then, regardless of any argument as to whether such a term would be unfair- the debtor would need only to show a court (IMO) that he had breached before the creditors termination (for no apparent reason)- and that the true intent of the creditor was to circumvent the provisions of s87

 

Not being obtuse but really do not see your point.Yes the creditor could use a contractural termination after an inefective default,because the agreement would stll be blive.But it wold do him no9 good he would still not be able to enforce so why would he.

 

3/ similarly, a creditor who serves an invalid DN (or none at all) and declares that under s87 he will terminate/do those things which s87 entitles him to do- and then seeks to "switch" the reason for the termination to a contractual termination in order to get him out of his mess- will (IMO) before a judge with half an ounce of common sense- get short shrift.

 

I agree he could not enforce

 

The current thinking is that a creditor is ruled not to have terminated where he has failed to serve a DN (or has served an invalid DN) even though he claims he has terminated- and even though he may be unaware- for quite some time- that he has not actually terminated

Yes it would only come to light when challenged of course

 

By the same token therefore it must be as sure as hell that the same ruling would be applied (IMO) to any termination by the creditor - following a breach by the debtor- who was clearly trying to circumvent s87

 

He couldnt

 

I understand that others may say - "ah but he may terminate if and when he feels like it - - but then concede that he cannot legally enforce" -(or worse KNOW that he cannot legally enforce- but omit to mention that important bit)

 

Not me always mention it unless io forget,but it is obvious

 

To me (and i suggest most caggers) such a statment is a total irrelevance-and distraction since i doubt that many caggers would be interested in what the creditor could "threaten to do- without authority" - and are more interested in what a creditor could do and which he could "legally enforce"

 

 

Wel some caggers may dissagee i know a few over on toymakers thread who woud to be sure .Egg terminated them on a contractural term along with 16000 others.

Really what brought the subject up was the talk of repudiation ,this is entirely relevant to the difference between contractural termination and termination after breech,as i am sure you know

 

This is absolutely nothing to do with attempting to avoid debt- but merely establishing that if the creditor terminates an agreement- when the debtor has done nothing wrong-

whether by mistake or deliberately- then the creditor at the very least- cannot expect the debtor to pay for the creditors own mistake

 

He is not bring asked to pay for te mistake though ,is he?Surely he is being asked to repy the money he loaned

 

nor can he demand immediate repayment of sums that otherwise would not yet have been due, in front of a judge who has his brain in gear- since the judge would in these circumstances (IMO) hold not only that the creditor was trying to circumvent the provisions of the act which protect the consumer - but to penalise or prejudice the debtor for actions or words the debtor may have wrongly used in response to being misled by the creditors words or deeds and which would never have occurred but for the creditors mistakes

 

I think this has already been addressed

 

To attempt to hold the debtor accountable for technical mistakes in his response to an unlawful or misleading act or statement by a creditor- is about as perverse as one could imagine

 

Any mistake made by the creditor does not discharge the liabilities uner the conract, unless the court says it should,and in the case of a missstated notice of action this is not likely and has never happened to my knowledge

 

The CCA was CLEARLY drafted based on the proposition that the debtor is likely to be unsophisticated and confused by the technicalities of both the meaning of the terms and conditions of a credit agreement and the regulations surrounding the CCA and therefore needs "protection" from unscrupulous lenders

 

Nothing unscrupulous about demanding the return of loans after a breach is there?

so what could be more unscrupulous than a creditor writing invalid and misleading DN's to a debtor, terminating agreements he is not allowed to terminate- and then using the debtors response as a technicality for getting his way- this is the VERY thing the act was drafted to prevent

 

 

 

IMO

 

I answer to your last point.

Nothing unscrupulouse about witing a defective notice. Just an error,no point in doing it on purpose and loosing the right to enforce.

The debtor choses to terminate, that is up to them.If they do it with the mistaken conseption thsst it will enable them to evade the debt and it backfires,i suspect they will get little simpathy from the court.

[Peterbard]

Very well put DD.

 

Indeed

[Peterbard]

the creditor may well, in the case of a non default situation be entitled to terminate an agreement under a separate clause in the agreement- but he will NOT succeed- if he does- in legally enforcing payment of sums that were not yet due at the time of his termination.

 

NO he would not be able to recover any future interest on a loan if he terminates under a contractual clause, but he will still be able to recover the principle plus any interst already due.

Which really is the same thing as a termination on breach on a loan agreement considering that the 1983 reabte regulations would entitle the unpaid future interst to be refunded anyway.

BUt as you say the court would not enforce a none breach termination if there was no other reason for doing so.

 

 

you responded to a statement i made .........with a statement that has nothing do to with the statement i made.. (nothing new there then!).

 

nowhere in my statement did i suggest what the creditor could or could not claim..............i merely made the point that WHATEVER is owed to him he would be unable to lawfully enforce a demand for immediate payment ot it

 

Think we have established he can demand section 76

[DonkeyB]

1/ If the creditor terminates after a breach by the debtor- and then attempts to serve a DN (which he would have to do if he were to rely on the debtors breach in his POC), then the DN would necessarily be invalid as soon as the creditor wrote it- since the DN 's prescribed text is predicated on the agreement to which it is being served- being a live and enduring agreement- which of course it could not be if the creditor has already terminated it (for whatever reason), thus the recipient could not comply with it and obtain the benefit of s89 for doing so

 

This is untrue.

There is no requirement for the agreement to be "live" as you put it before a default notice is served. Section 87 just says a regulated agreement,it does not say "under an agreement "or an "unterminated agreement". DNs are regularrilly nissued by assignees who have a terminated account assigned to them.

 

Quick question on this one Peter.

 

Many of the assignees who issue DNs on terminated accounts must allow remedy, surely. How can a debtor remedy a terminated account?

 

Often, these same assignees then state that they do not need to comply with a s78 CCA request on such accounts as the account has been terminated, and therefore the act does not apply. Surely they can’t have it both ways? Choosing to apply the act when they want, and choosing not to when it suites them?

 

And what is the purpose of issuing a DN on an account that has already been terminated? Usually at this stage a DN has been served, the breach not rectified, and a termination issued, and the account sold.

 

This is very confusing. Hope my questions make sense.

[DonkeyB]

Sorry about the typos, can’t edit.