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Understanding your rights

You have probably heard a number of companies claiming credit agreements are unenforceable. So what is it all about?

The Consumer Credit Act 1974 gives you certain rights which help protect you if there is a problem, for example, the right to change your mind for a period after making the agreement (a cooling off period). If a credit agreement is a regulated agreement, the credit provider has to follow certain procedures and cannot enforce the agreement unless these procedures have been carried out.

The credit supplied must not exceed a financial limit of 25,000. However, we are coming across unenforceable agreements above this limit due to individuals topping up loans for debt consolidation (resulting in a multiple agreement being formed), or the agreement proving to be multiple for other reasons.

Examples of consumer credit agreements include:

If you have any of the above credit agreements, it may be that the agreement does not comply with the prescribed terms of the Consumer Credit Act 1974, resulting in the agreement being unenforceable. Other agreements are exempt from the Consumer Credit Act, such as:

Whilst Bournes does specialise in agreements regulated by the Consumer Credit Act, there are cases where we can help on agreements exempt under the Act.

We are currently assisting a client who had previously run a small business and had an outstanding account with his landlord for arrears on a shop lease. His former landlord is in the process of applying for an Order for Sale (repossession of his property), having obtained a charging order for a debt of 22,000.

Because this case is ongoing, we are unable to provide you with any details at this time. However, we will keep you updated in our blogs.

Over the years we have seen a significant increase in the number of creditors applying for Charging Orders, however, this is the first time we have come across a creditor enforcing the order. We believe this is just the beginning and we will see a lot more cases of people approaching us for assistance to prevent repossession.

There are a number of things you can do to prevent a charging order being secured on your home, such as:

Once a Final Charging Order is made, the debt will remain secured on your property until such time as the debt is cleared in full, or the creditor enforces the Order.