Sale of debt and consequences

[taureantom]

;-)Hi,

I introduced myself yesterday but didn't get round to specifying the whole problem and my current ideas for tackling them.

Barclaycard sold the debt owed by me to them to an associate company of Lowell Financial who now pursue the debt. I have received no correspondence whatsoever from Barclaycard over this matter but have been harassed by Lowells for payment.

A number of years ago I fell on hard times due to extreme health problems and as such, couldn't keep up the repayment sums due. The sum owed had to be consolidated and an agreement was reached between Barclaycard and myself that I pay them a fixed monthly amount. I have maintained that arrangement for a period of ten years!

I was therefore surprised to receive a threatening phone call from Lowells informing me of their purchase of the debt accompanied by demands for payment. I didn't agree to anything over the phone and said that I must contact Barclaycard about this matter. I did.

The girl in the legal recovery department at Barclaycard was very nice and I am sure, tried here best to help me, especially considering the constraints she must have been under. The main point she made, apart from confirming the sale of the debt, was to inform me that the debt was 'statute barred' and advised me to write to Lowells informing them of this fact.

I did. They said that they would investigate.

They left me alone for a few months, apart from non-threatening offers through the post. Then the threatening phone calls started; apparently there were to be dire consequences if I didn't conform to what they wanted. I maintained that I had received no written instruction from Barclaycard to cease paying them the agreed monthly sum which I am still doing. This did not please Lowells.

I am an OAP on a basic pension which includes a 'guaranteed pension credit supplement' and as such, I receive housing benefit and council tax relief. I can imagine that my current financial situation doesn't please Lowells either.

However, because of Lowells behavior and worrying how to deal with it my attention has been taken away from Barclaycard who, when you consider it, and especially as everyone in the financial field know about Lowells reputation, dropped me into that particular cauldron with no consideration apart from their own pockets. They are dogs really.

My attention is now focused on Barclaycard but not as I first directed it toward protecting me from Lowells, but to what were the legal consequences of selling the debt while it was being serviced, and had been without interruption for almost ten years.

If I had paid Barclaycard nothing and they had let it lie dormant for six years the debt would be 'statute barred', but, in my case it had been honestly serviced. So why in this circumstance should I be singled out to be liable to repay a debt now legally owned by someone else whereas, someone who had never bothered to pay anything gets away with it. Can the law of the land be so inconsiderate?

I hope to see a solicitor next week for a freebie interview - one of the benefits of being poor I suppose. However, I will have an hypothesis to put to them which is the following:

 

Question: Legal - What is legal in respect to my agreed payments to Barclaycard over a ten year period (I still have their letter proposing it)?

My speculative answer: ESTABLISHMENT - I am theirs and no one else's!

There is nothing in the agreement that specifies 'transference of the agreement'.

Yes, the extreme length of the period the agreement has run 'ESTABLISHES A PRECEDENT'. - The precedent establishes a relationship - In this case the lender and the debtor - I am the stated debtor and Barclaycard are the stated lender to whom the debt is due - That relationship precedes any other - Therefore, when the stated lender arranges transfer of a saleable item such as the loan arrangements, the relationship alters.

However, as in this case the arrangements have transpired over a significant period and so the relationship (Barclaycard and me) are legally established IN LAW - It is no longer a temporary or even an expedient arrangement.

 

Another question:

Was it legal for Barclaycard to sell the debt to Lowells?

They have actually done it and so the legality is commensurate with what happened.

In this particular case Barclaycard infringed their own contractual obligation which was: THE PRESERVATION OF THEIR RIGHT TO DEMAND REPAYMENT!

Without the removal of the precedent the fact of the transfer from the original lender to a purchaser will RENDER NO OBLIGATION as far as the debtor is concerned.

Lowells must establish a new one! No chance!

The present arrangement of Barclays to the new debt owner (I continue for the moment until this matter is cleared up legally, to continue paying Barclays the agreed amount every month) has no precedent in law, even if it was 'lawful' for Lowells to purchase the debt.

However, the right of the purchaser of the debt (Lowells) to seek recompence from Barclays will be substantiated once 'I have established my prevailing right'.

Barclays actions have absolved me from any duty to repay the debt!

 

In other words I must sort Barclaycard out; Lowells have no legal basis for claiming anything from me.

Barclaycard may be able to sell the debt but they cannot transfer AN ESTABLISHED DUTY TO PAY.

 

Is there anyone out there who knows anything about 'contract law' who would oblige with advice that 'legally binds' and will lead to a resolving of this issue.

If this is proved it could help a lot of poor people out there.

Thank you for being patient and reading this through to the end.

[rory32]

First of all in order for the debt to be enforced there requires to be a contrct. This is known as a consumer credit agreement. Due to the age of the account it is unlikey that there is one.

 

I would send Llowells a CCA request. You can find one here http://www.consumeractiongroup.co.uk/forum/general-debt/20758-creditors-dcas-letter-templates.html template N. It only costs £1 but you should send it recorded delivery so you can prove they got it.

 

With regards to selling the debt this will have been done by an equitable deed of assignment where the right to collect but not the obligations of the creditor have passed to Lowells. The information below demonstrates the legal position on this.

 

32.2.4. Assignment of debts

Assignment is a process whereby debts are sold on to another organisation, and is common practice within the industry.

For an assignment of a debt to be legally effective, it is necessary to assign both the rights and the responsibilities of the creditor under the agreement.

Partial assignment which, in effect, assigns the right to enforce but not the associated responsibilities will be invalid and will preclude the assignee from enforcing the debt.

 

Please, if you have any questions just shout.

[lookinforinfo]

The argument Barclaycard would use is that you broke the original contract

all those years ago.

Although you made a new agreement it probably does not carry the same legal weight as the original. And it is possible that they entered a default on your credit file at some time between then and now.

 

If they have, then that is all that is required for them to assign your debt

to Lowells. And it is covered by the Consumer Credit Act rather than the

Law of contract.

 

If they never sent you a default notice, [it is a letter where they ask you to repay all the money in one go as you have failed to make several payments]

then you may have a case against them. However most companies when asked for a copy of the default notice say they do not file one, the just send

out a standard copy that everyone gets.

 

However al is not lost.

In light of the time that has expired since you first got your credit card, it is

likely that Barclays no longer reatin the original. If that is the case, then

legally neither they nor Lowells can force you to pay a single penny more if

you don't want.

 

what you have to do is send £1 postal order and this letter to Lowells.

 

Dear Sir/Madam

 

Re:− Account/Reference Number [Tom -fill in your reference number here]

With reference to the above agreement, I would be grateful if you would send me a copy of this credit agreement.

 

I understand that under the Consumer Credit Act 1974 (Section 78 ] I am entitled to receive a copy of my credit agreement on request. I enclose a payment of £1.00 which represents the fee payable under the Consumer Credit Act.

 

I understand a copy of our credit agreement should be supplied within 12 working days.

 

I understand that under the Consumer Credit Act creditors are unable to enforce an agreement if they fail to comply with a request for a copy of the agreement under this section of the Act.

 

I look forward to hearing from you.

 

Yours faithfully

 

............................................................................................

 

They then have to send you a copy of the original agreement signed by both

you and Barclaycard when you first joined them.

 

Send the letter to them with a £1 postal order, and send it recorded delivery.

Please let us know what Lowells say when they reply., and then keep us

informed of what they send you in respect to documents and paperwork [if

anything] and someone will advise of the next step.

 

Do not be intimidated by Lowells. Do not speak to them on the phone. If they

ring, say you have been advised to keep all dealings with them in writing.

 

Should they ring again, put the phone down straight away without speaking to them. This is to stop them possibly scaring you on the phone. These companies

often use the phone and say things that they wouldn't dare in writing.

[taureantom]

Thank you very much for your contribution to my salvation, I will do it.

I have also had another piece of advice which includes some of yours therefore, this system of cooperation works!

Thank you again.

[tifo]

32.2.4. Assignment of debts

 

Assignment is a process whereby debts are sold on to another organisation, and is common practice within the industry.

 

For an assignment of a debt to be legally effective, it is necessary to assign both the rights and the responsibilities of the creditor under the agreement.

 

Partial assignment which, in effect, assigns the right to enforce but not the associated responsibilities will be invalid and will preclude the assignee from enforcing the debt.

 

Do you have more info on this as Cabot also use this argument of being the owner but not the creditor and i need something legal to backup my arguments to them.

 

No use shouting 'you are' and 'am not' to each other!

[rory32]

Well tifo you really need to use their pig ignorance of the law against them. Cabot often say they are the legal assignee under section 136 of The Law of Property Act 1925. The Law of Property Act requires an absolute assignment of the chose (the debt).

 

s136

Legal assignments of things in action.- (1) Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice-

(a)

the legal right to such debt or thing in action;

(b)

all legal and other remedies for the same; and

©

the power to give a good discharge for the same without the concurrence of the assignor:

Provided that, if the debtor, trustee or other person liable in respect of such debt or thing in action has notice-

(a)

that the assignment is disputed by the assignor or any person claiming under him; or

(b)

of any other opposing or conflicting claims to such debt or thing in action;

he may, if he thinks fit, either call upon the persons making claim thereto to interplead concerning the same, or pay the debt or other thing in action into court under the provisions of the Trustee Act, 1925.

They also often state that they are not the creditor. If you look at the definition of creditor under the CCA1974 S189(1)

“ creditor “ means the person providing credit under a consumer credit agreement or

the person to whom his rights and duties under the agreement have passed by

assignment or operation of law, and in relation to a prospective consumer credit

agreement, includes the prospective creditor;

USING THEIR ARGUEMENT IT THEREFORE FOLLOWS THAT YOU CAN NOT BE THE DEBTOR.

189(1) "debtor" means the individual receiving credit under a consumer credit agreement.

[tifo]

they won't have it.

 

if they say they are not the creditor, they will still shout they took the duties but not the obligations.

 

is there anything more apart from LoP s136 and CCA 1974 s189?

 

if i tell them that under their own logic i am not the debtor they will also not accept this.

 

its not easy making them see sense.

[rory32]

Have you got a response from your CCA request tifo?

[tifo]

of course Rory,

 

along the lines of 'under s136 LoP we are not the creditor but still you owe us money blah blah, but we will assist you in asking the original creditor for the documents you requested', all courtesy of Mr Wellinghoff.

 

they're still maintaining the defaults but have stopped asking me for any money.

 

i wonder if they are putting any charges on as they can't even do a simple thing like send a statement from themselves?

[tomterm8]

First of all in order for the debt to be enforced there requires to be a contrct. This is known as a consumer credit agreement. Due to the age of the account it is unlikey that there is one.

 

I would send Llowells a CCA request. You can find one here http://www.consumeractiongroup.co.uk/forum/general-debt/20758-creditors-dcas-letter-templates.html template N. It only costs £1 but you should send it recorded delivery so you can prove they got it.

 

With regards to selling the debt this will have been done by an equitable deed of assignment where the right to collect but not the obligations of the creditor have passed to Lowells. The information below demonstrates the legal position on this.

 

32.2.4. Assignment of debts

 

Assignment is a process whereby debts are sold on to another organisation, and is common practice within the industry.

 

For an assignment of a debt to be legally effective, it is necessary to assign both the rights and the responsibilities of the creditor under the agreement.

 

Partial assignment which, in effect, assigns the right to enforce but not the associated responsibilities will be invalid and will preclude the assignee from enforcing the debt.

 

Please, if you have any questions just shout.

 

Where did you get this from? it's not what the law textbooks say. there are several different classes of assignment in the law textbook that include

 

Legal (Absolute) assignment of Legal things in action

Equitable assignment of legal things in action.

 

A Legal assignment occurs under the Law Of Property Act and generally requires the consent of all parties to the contract at the time of assignment to be effective. It is what your quote talks about.

 

An Equitable assignment is the assignment of the benefits of a contract, without changes to the obligations or duties. The benefits of such an assignment in the traditional view can only be enforced with both the asignor and assignee as parties to the claim. In fact, under the Contracts(Rights of third parties) Act - which does not apply to scotland - the traditional privity of contract doctrine has been watered down and the asignee may have the right to sue in its own name. However, in all cases in an equitable assignment the same defences are effective as against the original contract holder.

 

NOTE:

 

The important thing is that under the CCA 1974, ONLY THE OWNER AND/OR CREDITOR has the right to apply for an enforcement order, and "owner" does not mean "equitable owner" but the person who provides goods under a hire purchase agreement. Simply put, if CABOT admit they are not the creditor, they have no legal right to sue in their own name whatsoever.

[make them aktiv runners]

Where did you get this from? it's not what the law textbooks say.

 

Tbern (I think) found it, it is from a memo published by Birmingham Money Advice & Grants:

http://www.b-mag.org.uk/memos/Cascading%20Memo%2032.doc

[rory32]

That would be the one Aktiv. Tomterm8 the quote from the memo was done for the benefit of the OP to help them understand how debts are sold and to try and put it simply (No offense intended taureandtom).

 

I find I seem to be in a lose/lose situation at the moment. If I explain in statute I'm asked to explain it again in laymans terms. If I explain in laymans terms I'm asked to justify it by statute. It's becoming very tiresome and I'm beginning to think in the future I'll just leave it to others.

[rory32]

Tifo if you want to attack Cabot I always find it easiest to do this by attacking the OC. After all who wants to sell their debts to a DCA that allows the OC to be attacked.

[tomterm8]

That would be the one Aktiv. Tomterm8 the quote from the memo was done for the benefit of the OP to help them understand how debts are sold and to try and put it simply (No offense intended taureandtom).

 

I find I seem to be in a lose/lose situation at the moment. If I explain in statute I'm asked to explain it again in laymans terms. If I explain in laymans terms I'm asked to justify it by statute. It's becoming very tiresome and I'm beginning to think in the future I'll just leave it to others.

 

Rory, I wasn't asking you to justify the source in terms of statute, all I was asking was where you got the source of your quotation. As you know, law textbooks are often wrong - most textbooks deal with general law (e.g. contract law) while we are discussing a specialised area of law; in addition, almost every textbook i've seen deals with the pre-2006 situation.

 

It's always hard to deal with people over the internet, as you don't have body language etc to provide you with clues as to what people mean. No offence was intended; you do good work on the forum, and give people good advice. I would hate to think you stopped doing that because of me.

[tifo]

Tifo if you want to attack Cabot I always find it easiest to do this by attacking the OC. After all who wants to sell their debts to a DCA that allows the OC to be attacked.

 

I'm trying not to get the OC involved. For one thing both OC's have been bought by other companies and documents are very hard to come by.

 

I've also put in claims for charges back from both OC's and these are worth nearly 3 times the actual debts. So i am waiting for them to pay me out. I don't want any of this used up for the debt. I want it to come to me so i can use some of it towards a settlement.

 

I want Cabot to 'write off' the debt as it's not my problem they cannot supply any documents. If they are able to supply true documents, then i will offer them something.

[taureantom]

May I again thank the contributors for their inputs which have been very useful so far. An update ...

I have applied for a copy of the CCA and I now have to wait and see if there is one.

I am expecting a reply from Barclaycard in the next couple of weeks regarding 'my complaint'!

As regards Lowells I am still blocking their phone calls due to their usual threatening content. There are now two types of letter emmanating from Lowells coming through my letter box, one type is computer generated and designed to put pressure on the victim and the other type is a dictated response to my correspondence and requests, and this latter type are moderate and correct and as a decent and normal person would expect from a company trading under our laws.

As far as my initial blurb is concerned there still seems to be an unresolved point in it in as much as ...

The original CCA contract terms were altered ten years ago when the debt sum was consolidated as an interest free item and all future borrowing rights suspended.

I maintain that a new contract was established between Barclaycard and myself over time and regular practice. Because of chronic ill health and the need to live off benefits my regular monthly contributions to the debt repayment were at best 'nominal'. However, the size of the debt and the relative size of the repayments do not alter the legal framework that governs such arrangements. It has now gone on for ten years.

Of necessity Barclaycard must have altered this contract arrangement by selling the debt to Lowells.

What is the legal relationship of the latter contract arrangement to the original CCA agreement?

Because of the latter contract did Barclaycard inadvertently dispose of a required strict adherence to the terms of the original CCA agreement?

Time!

This seems to be an item that is legally adjustable in that ... the actual period of time an arrangement is met by both parties will determine the establishment of an over-riding contract. Ten years!

 

Anyway, I await news from abroad.

Thank you for your interest and yes, I will be donating something to this worthy organisation. Just wait a couple of weeks!

[tomterm8]

The original CCA contract terms were altered ten years ago when the debt sum was consolidated as an interest free item and all future borrowing rights suspended.

I maintain that a new contract was established between Barclaycard and myself over time and regular practice. Because of chronic ill health and the need to live off benefits my regular monthly contributions to the debt repayment were at best 'nominal'. However, the size of the debt and the relative size of the repayments do not alter the legal framework that governs such arrangements. It has now gone on for ten years.

Of necessity Barclaycard must have altered this contract arrangement by selling the debt to Lowells.

What is the legal relationship of the latter contract arrangement to the original CCA agreement?

Because of the latter contract did Barclaycard inadvertently dispose of a required strict adherence to the terms of the original CCA agreement?

Time!

This seems to be an item that is legally adjustable in that ... the actual period of time an arrangement is met by both parties will determine the establishment of an over-riding contract. Ten years!

 

Anyway, I await news from abroad.

Thank you for your interest and yes, I will be donating something to this worthy organisation. Just wait a couple of weeks!

 

Frankly, you are trying to take concepts out of a general legal field (Contract law) and apply them to a field that is specialised and strictly regulated (Consumer Credit law).

 

A variation of contract of the kind you are discussing is not, in my view, applicable to consumer credit law. When you breach a consumer credit agreement and the creditor choses to terminate the agreement, you become liable for all monies due under the agreement and the creditor can apply for a court order at any time* to recover this debt. The fact that they chose to accept a repayment plan for several years doesn't affect this right unless both parties explicitly vary the agreement in writing.

 

* until the debt becomes statute barred as a result of non-payment / non-acknowledgement for 6 years

[rory32]

As tomterm8 suggests I think you are trying to over complicate this. If they can't supply a true copy of the agreement then the debt is unenforceable. Due to the age of the original agreement it is highly unlikely that they will be able to supply it.

 

Most financial organisations have misinterpreted the rules on keeping agreements. A lot of them have only kept application forms or, if they have kept the agreement, have only kept it for 6 years from the account opening (they are supposed to keep it for 6 years after the account has been closed).

[tomterm8]

;-)Hi,

 

I am an OAP on a basic pension which includes a 'guaranteed pension credit supplement' and as such, I receive housing benefit and council tax relief. I can imagine that my current financial situation doesn't please Lowells either..

I also thought you should be aware that:

 

1. pension credit supplement is an inalienable benefit (see schedule 2 s23. of the State Pension Credit Act 2002 ).

 

2. housing benefit is inalienable benefit as defined by s123 of the social security and benefits act 2002.

 

Since you are on these benefits, a court would consider this de facto proof that your income was considered by the state as insufficient to provide for more than basic needs and, under these circumstances, a court could not grant more than a nominal installment order on any judgement.

 

(inalienable means that it can't be subject to a charge, lien , bankruptcy order or court judgement).

[taureantom]

Thank you for the replies to my attempts to flog a dead horse!

My eldest daughter is a chartered accountant and when I broached the matter to her the response was 'Don't worry - you haven't got any money so they can't do anything - if they went to court the judge would throw it out!

I must be a born worrier.

[taureantom]

May I ask a question of those with some legal knowledge of 'Statute Barred'?

In my opener I stated that someone at Barclaycard had told me that my account was Statute Barred as it was over six years old. However, I have paid a small monthly repayment which has not varied over a nine/ten year period so ....

Does 'Statute Barred' apply only to accounts that have lain inactive in the sense of 'moribund'. or can an account such as mine qualify as 'Statute Barred' because it has remained STABLE for more than six years?

Well, it's a thought!

[powelll]

May I ask a question of those with some legal knowledge of 'Statute Barred'?

In my opener I stated that someone at Barclaycard had told me that my account was Statute Barred as it was over six years old. However, I have paid a small monthly repayment which has not varied over a nine/ten year period so ....

Does 'Statute Barred' apply only to accounts that have lain inactive in the sense of 'moribund'. or can an account such as mine qualify as 'Statute Barred' because it has remained STABLE for more than six years?

Well, it's a thought!

 

If you have paid on the debt within the last 6 years then the Statute of Limitations doesn't apply. If a 3rd party had paid on your behalf it may be a different matter but this won't apply from what you are saying...sorry!

[rory32]

This should answer your question.

 

Law relating to debts: statute-barred debts

If a lender allows time to pass without receiving any payment an action for recovery may become barred.

 

Under the Limitations Act 1980 the time limits are

• in simple contracts, 6 years (e.g. credit cards)
  
• in contracts under seal, 12 years.

If the debtor acknowledges the debt in writing or makes a part payment within the original limitation period, then the time limits start to run again from the date of acknowledgement or the date of payment.

 

Even though the lender may be barred from pursuing recovery, a debtor may decide to pay the debt after the expiry of the time limits. Because of this you should allow a debt which is otherwise statute-barred if the personal representatives pay the debt and you receive evidence that the payment has been made.

 

The above instructions do not apply to debts in Scotland. Under Scottish law, if a lender allows time to pass without receiving any payment an action for recovery may become barred under the Prescription and Limitation (Scotland) Act 1973. (For details of this Act see Gloag and Henderson 10th edition at Chapter 15.). These debts are completely extinguished and cannot be enforced. Once the prescriptive period expires the debt cannot be allowed as a deduction.

[tomterm8]

However, the chance that Barclaycard has an actual legible credit agreement can't be more than 5%. so do the credit agreement request. No legible credit agreement signed by both parties, no enforceable debt. Simple.

[powelll]

However, the chance that Barclaycard has an actual legible credit agreement can't be more than 5%. so do the credit agreement request. No legible credit agreement signed by both parties, no enforceable debt. Simple.

 

Very true Tomterm8; sorry I should have pointed that out! ( blushes )