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s.86 (B) CCA 1974 on a terminated account


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where in the CCA does it state about applying default interest on a terminated account that enables the creditor to send these notices as to 86 (B) CCA

 

I am after a statutory requirement as to the CCA, not opinions

 

thanks

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I think there is some confusion. S86(b) has no mention of interest. It is all about statements. Guidance notes are in OFT 1002 and that explains what must be in the statements.

But in answer to what i think you are asking yes post termination interest can be applied.

Any opinion I give is from personal experience .

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But in answer to what i think you are asking yes post termination interest can be applied.

 

BUT WHERE IN THE STATUTORY LEGISLATION THAT IS THE CCA 1974 DOES IT STATE THAT

 

I understand about post judgement interest, its post termination interest clarity that i am after as to the CCA 1974 (2006)

 

million dollar question

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thanks for the response but sorry to keep going on but are you saying the ability to charge post termination contractual interest is not under any statutory instrument, but written into the terms and condions of the finance agreement

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Certainly in some of mine it is. I take it you have a particular problem.

Sorry i can't give the definitive answer. I suspect it's one of those things that you would have to argue.

Any opinion I give is from personal experience .

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finding out the Data/contract/regulation on applying post judgement interest is fine, its applying post termination contractual interest prior to judgement that i am after

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In your first post your query was with regards to " the creditor entitled to keep charging default interest " now its with regards to " applying post termination contractual interest prior to judgement "

 

 

If you can decide which you need assistance with squaddie I will amend your thread title to make sense.

 

Regards

 

Andy

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The question is

 

After a creditor has terminated a credit agreement regulated by the CCA 1974, PRIOR TO A DEFAULT JUDGEMENT (CCJ)

 

1) Can the creditor still still send a notice of default sums as to s. 86 (B) of the CCA 1974

 

2) If a creditor can add post termination contractual interest before a CCJ, can a creditor continue to charge post termination interest through either statutory means, or contractual means as to the credit agreement

 

Many thanks

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The question is

 

After a creditor has terminated a credit agreement regulated by the CCA 1974, PRIOR TO A DEFAULT JUDGEMENT (CCJ)

 

1) Can the creditor still still send a notice of default sums as to s. 86 (B) of the CCA 1974 They must.....according to the CCA 2006 (sec 86B) amendments failure prevents them charging Interest on any relevant sums due or enforcement

 

2) If a creditor can add post termination contractual interest before a CCJ, can a creditor continue to charge post termination interest through either statutory means, or contractual means as to the credit agreement.Subject to their terms and conditions of the agreement

 

Many thanks

 

I think you are muddying the query with Termination...Terminated or not it all depends on the T&Cs

 

Regards

 

Andy

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You wont .....you appear not to understand the term "Termination"

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Please elaborate your view on Termination

 

termination is one thing, enforcement on a terminated agreement is another

 

that's how i see it

 

your input much appreciated

regards

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You first....I fully understand what termination is implied in agreements.Its your query and you seek clarity..

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a creditor terminates the agreement as to the default and termination regs as to statutory requirement

 

Terminated and ending the agreement is dependent on the court, as soon as a CCJ is issued, the agreement is then officially terminated/ended as the agreement is then subject to the court after a CCJ, not the creditor, the creditor just becomes the claimant.

 

MY question was on what statutory or contractual obligation is on the debtor (post termination interest) after the creditor has terminated the agreement, (not ended) as the agreement can still be seen as active if a balance is still outstanding and the contractual obligations have not been settled by the debtor.s

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Yes thats the basics of it...In my eyes an agreement is only terminated by 3 ways:-

 

You pay it off

They write it off

They have judgment.

 

There is no statutory obligation there is contractual obligation ...its in the creditors terms and conditions that you have signed and agreed to to use their facility.

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But if they do not comply with the issue of a Notice of Arrears they can not add anything sec 86B CCA 2006

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No problem Squaddie I hope it assists with your studies.

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For your folder squaddie

 

Arrears notice penalty:

Of course when a trader provides credit, the debtor may default, perhaps knowingly, perhaps unknowingly. Either way, the creditor is under a duty to provide the debtor with a notice stating that they are in arrears and owe ‘x’ amount of money.

 

A new amendment has been made in case of failure to give notice of sums in arrears in CCA 1974. Section 11 CCA 2006 inserts a new section - 86D - that sets out the consequences for a creditor or owner if he fails to give a notice as required by sections 86B or 86C.

 

If the creditor or owner fails to provide a notice of sums in arrears when required to do so, then during the period of his failure to provide the notice (i.e. from the date that it was required to be given until the end of the day on which it is eventually provided), he is not entitled to enforce the agreement. In addition,

 

The debtor or hirer is not liable to pay any interest that relates to the period of the creditor or owner’s failure,

 

Notice of default sums

Section 12 of CCA 2006 applies to situations where a debtor or hirer under a regulated agreement incurs a default sum.

 

A creditor or owner must give the debtor or hirer a notice in the specified form when a default sum becomes payable as a consequence of a breach of the agreement. For example, you hire a car for the duration of your holiday. There will often be a penalty sum payable if you incur a fine from using the car. The car-hire company might say this is to cover, for example, administration charges. Either way, certain sums are payable if you breach the agreement. Where this applies, the creditor must provide notice to the debtor, of the amount they must pay. This only applies where the default sum exceeds a specified amount.

 

Additionally, a creditor may only require a debtor to pay interest (in connection with a default sum) 28 days after the day the notice was given to the debtor. So if the creditor fails to give notice to the debtor then he can not enforce the agreement until notice is given.

 

Default sum

The term ‘default sum’ has been redefined in s.18 CCA 2006. “Default sum” now means: a sum payable by a debtor or hirer in connection with his breach of a regulated agreement (e.g. a charge imposed for late payment of an instalment due under the agreement or a fee imposed for exceeding a credit limit on a credit card). A default sum does not include sums that, as a consequence of a breach of the agreement, become payable earlier than they otherwise would have done. Nor does it include interest.

 

Interest on default sums

Section 13 has been amended so that a creditor or owner may only require simple interest to be paid in respect of default sums payable by the debtor or hirer. This includes sums payable under non-commercial or small agreements.

 

Minimum 14 days after Default notices

The new minimum period after which a creditor or owner may take action (in respect of the agreement after having issued a default notice) is now 14 days. It used to be only 7 days. Section 14 CCA 2006 amends section 88 of the 1974 Act to create this extension.

Additionally, under s87, a creditor or owner must give the debtor or hirer a default notice in the prescribed form if he wishes to:

Terminate the agreement;

Demand earlier payment of a sum;

Recover possession of any goods or land;

Treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred; or to;

Enforce any security.

 

 

Section 88 is also amended to allow the Secretary of State to prescribe information in the default notice to include any matters relating to the agreement (e.g. information about whether the agreement includes a term providing for the charging of post-judgment interest).

 

Regards

 

Andy:wink:

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