Loans taken out
before April 6th 2007 can be challenged and written off (or significantly
reduced) if the original contract agreement is lacking in certain aspects,
as laid down by the amended Consumer Credit Act of 1974. Although the
majority of credit agreements are about credit cards (which is, after
all, what this site is about) this covers any form of credit agreement,
including loans.
A lot has been written
in the media in recent months about loans before April 2007. Let's clarify
a bit about what type of loan is liable to be written off. Firstly,
both secured and unsecured loans are included, as long as they are under
£25,000 when taken out (not the remaining value of the "lump
sum") as loans above this amount are not covered by the provisions
of the amended Act. The purpose of the loan is immaterial: as long as
it was agreed before 6th April 2007 and it fails to meet the prescribed
conditions then it is elligible to be looked at to see if it can be
either written off or reduced.
It is fair to say
that secured loans are drafted with more care than unsecured loans,
so there is less chance of a secured loan write-off being successful.
Having said that, there is every chance that an unsecured loan write-off
will be successful, as long as the original agreement fails to meet
the amended requirements of the Act and you took out the loan before
April 2007.
If you took out
a loan before April 2007 there's a few things you could do to see if
you could write it off. You could ask the lenders for a copy of the
agreement and check it yourself, or you could get a solicitor to do
it for you. Of course, getting a solicitor is much easier, but it can
be expensive, although our service is much less expensive than most.
If you want to write
off your loan before April 2007 and want to have an informal no-obligation
chat with one of our legal team, then visit our specialist Write
Off Credit Card Debt site.
Loans Before April 2007