Introduction.

The idea of simply having a loan written off is, to say the least, an interesting and tempting one. Whether you’ve got more debt than you can cope with or just one loan that you’re quite comfortable paying off – everyone wants to be rid of their loan(s) and the repayments as soon as possible. So, when you see and advert or get a phone call from someone telling you that you could get any loan agreements written off – you’re bound to want to know more.

Claims management – a new industry.

Is there anything legally wrong with your loan or credit card agreement?

Is there anything legally wrong with your loan or credit card agreement?

 It might seem too good to be true but it is possible to get the courts to overturn a loan agreement you have, in your favor, against the loan company – if they’ve done something wrong with their end of the bargain. Of course that is all fair enough, if you default on your repayments of a loan, or even just miss a repayment, they’ll be quick enough to threaten you with the courts to get their money back. After all, they’ll say, you signed a legal agreement in entering into the loan arrangement or in accepting their credit card etc. So, fair enough then, if you’re in a legal contract and they do something wrong then surely it’s your right to take them to court too? Almost unbelievably there are loan agreements and even credit card contracts which, usually because of information being missing from them, are both technically and in reality not legal documents and therefore not binding on you.

What can make a financial agreement worthless?

Just about any credit agreement can be deemed unenforceable if some key information is missing from it. This missing information is often in the form of the total cost of the credit not being shown, the amount of arrears you are in or even your signature being missing on the loan agreement form.

Fairness and fairplay in repaying loans.

Where is the balance of judgement between financial fairness and the law?

Where is the balance of judgement between financial fairness and the law?

 OK, before you go rushing off to check the documentation for your loans and credit cards do ask yourself – should I expect something for nothing? After all, you entered into the loan of your own free will; you asked to borrow the money for whatever purpose and agreed to repay the money. Whilst the loan company may well chase you for payments if you fall behind, if you keep up with the payments they won’t be hassling you for earlier payments or more money – will they? Even better, presuming you’ve got your loan through an established and reputable company, having taken out a loan or credit card they’ll have given you a ‘cooling off period’ in which you could decline the loan or return the credit card. In other words, as much as being a legal agreement there is the element of trust in a loan arrangement. The old insurance agents used to say “their word is their bond”. Which basically meant that as soon as they’d said they agreed to and – they’d stick to it come rain or shine. Perhaps in these days of litigation and fault blaming, we should be more willing to accept things on trust?

Do loan companies lend on trust?

Until youve signed the agreement, the loans company is taking you on trust.

Until you've signed the agreement, the loans company is taking you on trust.

 Bearing in mind the last sentence above – a question you might well have is – where is the ‘trust’ element from the loans companies. Let’s try this as an example. You take out an online loan and, as you’d expect, the loan is sitting in your bank account the next day ready for you to spend. Now then, at the point of taking out the loan the loan company need your signature on the loan agreement form to make it legal and binding? However, being an internet loan they have to post the agreement to you for you to sign and return to them, which will take a couple of days at least.  At some point in that process, you could argue that you haven’t signed the agreement and are therefore not bound by it. However, are you making that claim on the moral high ground or just ‘trying it on’? Clearly the latter. In this instance you sought the loan; the lending company lent the money to you in good faith and knowingly in advance of receiving the signed agreement from you. They acted in good faith and you simply wouldn’t have done. Subsequently I doubt a court would entertain any claim you might make against the loans company.

Proportion and perspective in loan write-offs.

The essential point about loan write-offs is having a sense of proportion and perspective about it. If the lender is trying to make unreasonable demands on you that are outside of the agreement that is in your possession, then you probably will have grounds to seek redress through the courts. However, don’t expect a complete annulment of the agreement, more likely a re-balancing of it, bringing it back to some sense of proportionality.

But what about credit card companies?

Credit card debt can be pernicious, especially if the credit card company keeps raising your credit limit!

Credit card debt can be pernicious, especially if the credit card company keeps raising your credit limit!

 One area that could well be worth challenging for a write-off is credit card debt. Lets presume here that all is in order with the agreement between you and your credit card company, whether you owe money on your credit card that you can afford to pay off or are struggling to make the credit card repayments doesn’t really matter.  The first case you could have against them is if they should refuse you a refund on goods you bought using the credit card that subsequently proved to be faulty. However, a more interesting thought could be if you are in serious debt with your credit card company and, after signing the original agreement they increased your credit limit -without asking your permission or obtaining a new signature of approval. The issue here could be straightforward. By increasing your credit limit without your approval they have encouraged you to spend more on the credit card, increasing your level of debt.