Defaults, Settlement Offers and Token Payments

[the worm that turned]

Although the information here may in some way apply to my circumstances, I am hopeful that the discussion will prove useful to others.

 

I am attempting to ascertain the rules/law regarding the receipt of offers by a bank (or other financial institution) both before and after a default is registered on an account.

 

So some questions that will hopefully help with the discussion:

 

1. If a bank is sent an offer from the debtor for monthly payments on a debt that is not in default, with the first payment attached via a stapled cheque made payable to the bank, and the bank removes and cashes the cheque, does the bank agree to the offer?
   
2. Is there any written rule or law that enables the bank to accept the money provided in an offer of payment (as in 1 above) as a token payment towards the debt but WITHOUT communicating in writing to the bank that it does not accept the terms of the offer?
   
3. In relation to 2 above, does it make a difference as to whether the account is in default, or to put it another way, does an account in default afford the bank further rights with regards to what it can choose to do with an payment received regardless of what the offeror's intention was?
   

I am intrigued to hear peoples' thoughts on this as I have received various opinions on this from both lay people and qualified solicitors.

 

And finally, I wonder if the same applies in relation to offers of settlement, again with stapled cheque attached, whereby the bank may take the payment for another purpose (e.g. token payment towards debt) rather than as settlement, and in the meantime not communicate refusal of offer.

[dx100uk]

1.no.

2. no its a gift

3.no

 

 

there used to be some years previous

and mentioned

something about if the creditor accepts and cashes the cheque then they are bound by its terms

and they must write the rest of the debt off.

 

 

I think in the fullness of time this was found to be something of a folly.

 

 

the question I always ask anyone considering an F&F is WHY?

[the worm that turned]

OK, then allow me to add some meat to the bones...

 

dx100uk, hypothetically speaking of course, imagine that you loaned me £10,000.00 (you were feeling generous) and I agreed to pay you the money back in instalments of £1,000.00 a month, we would have an unregulated agreement and of course, assuming we met all the other criteria for the formation of a contract, a bi-lateral contract would exist.

 

Now, unfortunately after a few months of paying you this money both I and my wife were made redundant, and after reviewing our financial situation we were forced to reassess our existing obligations. This resulted in us only be able to afford to pay you back £500.00 per month.

 

We sent you an offer in the post that said:

 

Offer to dx100uk by TWTT to now effect payment of £500.00 per month on all demands/obligations in relation to the contract between us dated dd/mm/yyyy

 

And attached (via staple) to that offer was a cheque made payable to you for £500.00 from TWTT.

 

If you removed that cheque and cashed it, do you not agree that your action of doing so would be deemed as an acceptance to the new terms and therefore an amendment to the contract has occurred? If not, what was to stop you from sending back the offer (rejecting it) or sending it back with a letter stating that you had taken the £500.00 as part payment towards the monthly obligation of £1,000.00 and are happy with the contract as it stands?

 

Or in other words, you had options and were under no obligation to accept the £500.00 that formed part of an offer with new terms to be applied.

[dx100uk]

as said it would be treated as a gift..

 

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?381806-Lending-money-to-a-friend.&highlight=lent+friend+money

[the worm that turned]

The first page of the thread you linked appears to suggest it would be a contract and therefore a payment under the terms of the contract rather than the payment being a gift.