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Defaults and unenforcable credit agreements


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Can a borrower be a defaulter if a credit agreement is unenforceable?

 

 

Whilst looking for information on this subject I came across a case that I am struggling with slightly, see attachment. This seems to be a complex question and I am looking for clarity on this subject.

 

 

Using the information within my attachment can someone clarify whether or not it is correct to make an entry in to a debtor/s credit file that they are in default.

 

 

"Dispute Resolution analysis: Can a lender properly register a default with a credit reference agency where a borrower has not made payment under a so-called 'irremediably unenforceable' credit agreement? William Hibbert, a barrister at Henderson Chambers, considers the Court of Appeal's decision in Grace and another v Black Horse Ltd".

 

 

 

 

Info from here http://webcache.googleusercontent.com/search?q=cache:_V-Ok_yftNIJ:www.hendersonchambers.co.uk/wp-content/uploads/2014/11/Can-a-borrower-be-a-defaulter-Lexis-article-William-Hibbert-21.11.14.pdf+&cd=1&hl=en&ct=clnk&gl=uk

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This is purely about the accuracy of CRA records where the CCA is not enforceable. If the creditor cannot get the CRA to note a default relates to an unenforceable CCA, they should not record the default.

 

The reality is that the defaults will be registered and creditors will deal with any complaints as they arise. They are less likely to admit a CCA is unenforceable and will tell debtors they would have to test this in court if they wanted.

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Agreed UB...but the problem that arises is when the borrower has been defaulted in error...as correcting this data can be a mine field.The fact that the default should not be placed due to unenforceable is IMHO a technical glitch..which as stated in the attachment needs to be addressed by the CRAs..the fact remains money or goods have been given and made use of therefore the debtors credit worthiness must still be recorded...somehow.

 

Hopefully this will correct itself as time progresses and pre April 2007 agreements evaporate over time.

 

Andy

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