Unenforceable debts

Fastrak Law work with clients seeking to exit their debt management plans. Fastrak Law’s extensively experienced solicitors are suitably skilled to challenge the fairness of your unsecured debts once the debt management plan has been stopped.

In 2006, the Consumer Credit Act 1974 was amended to ensure consumers were protected from unfair and predatory lending practices. The Unfair Relationship provisions that were introduced mean that the Courts have the ability to re-open the agreement where unfairness is found by looking at:

  1. Whether any term of the agreement is unfair
  2. Whether the lender has enforced its rights under the agreement unfairly
  3. Whether anything else done (or not done) by the creditor is unfair

Where unfairness is found the Courts can:

  1. Order compensation to be paid to the borrower
  2. Write your loan off
  3. Modify the loan to deal with the unfairness

Fastrak Law will consider all relevant case law, legislation and regulatory duties your creditors were subject to. This may include:

  • Section 140 of the Consumer Credit Act (Unfair relationship claims)
  • The OFT’s irresponsible Lending Guidelines 2010/2011
  • The Protection from Harassment Act 1997
  • The OFT’s Mental Capacity Guidance for Creditors
  • The FCA’s Consumer Credit Sourcebook
  • The Unfair Terms in Consumer Contracts Regulations 1999
  • The Consumer Protection from Unfair Trading Regulations 2008

A common reason we find loans to be unfair is the lenders’ failure to properly assess your ability to afford the loan at the point it was provided. The Unfair Relationship provisions state that where an allegation of unfairness is raised, it is for the lender to prove fairness rather than the other way round.

In many cases, the original creditor who provided the finance has ‘sold’ the debt on to a third party purchaser, such as Cabot, Moorcroft, Link Financial or Lowell Group. These firms often buy these debts at a fraction of the debt level, sometimes as low as 3p in the pound.

How does it work?

  1. Fastrak Law will send you a claim pack. This will contain our terms of business and an authority to deal with your creditors. It will also contain a client questionnaire to allow us to assess whether your claim has sufficient prospects to continue
  2. Once your pack is received, our solicitors will write a letter of claim to your creditors setting out the basis upon which we believe the loan should be written off. Dependent upon your instructions, we will inform the creditors that because the debt is being disputed, you will not be making any payments (even reduced ones) whilst the complaint process is being followed
  3. Creditors will normally responds within 8-12 weeks. Fastrak Law will review their response and advise you on the next steps
  4. Where the creditor has denied liability, we will prepare an application to the Courts or FOS, clearly setting out the basis of your complaint. Alternatively, we can take your instructions at this point and make an offer of full and final settlement to the creditor on your behalf, thus reducing your debt level considerably