Credit file default

[sequenci]

The original CoA is the default date IMO.

 

it's the earliest time at which an actuin could be brought - Reeves v Butcher [1891] 2 QB 509. This is usually the point of default as you say - which contractually may not be the point in which a payment is missed but the point in which a claimant can first commence action. Take, for example, most credit agreements - they usually require a couple of missed payments which will then trigger the default process.

 

As an aside, a creditor cannot prevent the cause of action from commencing by never servicing a default notice etc, the cause of action will always be whatever's written in to the terms and conditions.

[sequenci]

Comment

The Court of Appeal’s decision is both pragmatic and

commercially sound. The Agreement, like many others,

stated that the balance became due upon termination. If the

Agreement had been regulated by the CCA, termination is

subject to the lender serving (where appropriate) a notice under

the CCA (most commonly a default notice or, for non-default

cases, a combined enforcement and termination notice). Notice

is specifically required before a lender can become entitled to

(amongst other things) demand “earlier payment of any sum”.

If the Court of Appeal had come to any other conclusion it

would have been contrary to the wording of the CCA. This

envisages that the balance does not become due (and cannot

be demanded as being due) until after the expiry of the notice

period. The Court of Appeal’s decision can also be used in

appropriate circumstances by lenders wanting to stop the

limitation period running. It seems clear that, subject to an

argument that the lender has affirmed the agreement by not

taking steps to accept a debtor’s repudiation, termination could

be delayed until the end of the term of the agreement. This

would allow lenders to delay (most obviously where the debtor

is in a difficult financial position or cannot be located) issuing

proceedings until the last moment, like BMWFS did, and avoid

being time-barred.

 

This is interesting, as the OFT have made it very clear that the actual 'default' process is regarded as a procedural bar and can be disregarded if a creditor never sends out the notice when they were supposed to as per the contract. It's been a while since I've looked in to this area, I really need to read that case by all accounts

[sequenci]

FYI, the whole procedural bar argument stems from Swansea City Council v Glass [1992] 2 All ER 680 and Royal Borough of Kensington and Chelsea v Khan [2002] EWCA Civ 279. The OFT letter was dated 28.5.98 so pretty old! As far as CCA defaults are concerned the argument of procedural bar is cited by Guest & Lloyd in the Encyclopedia of Consumer Credit Law (Sweet & Maxwell at 2-088)

 

Looks like I've a bit more bedtime reading to do!

[sequenci]

Any monies paid after a debt are treated as gifted and are not recoverable.

 

In Scotland there may be an arguement to have the payments returned as the debt is extinguished and therefore doesn't exist anymore.