The Myth of 'Writing Off' Debt
With thanks to Varangian from Penalty Charges
One of the biggest pressures placed on the forum since last year is the influx of people coming to the site in the expectation that there is some magic formula that allows credit card debts from before 2007 to be ‘written off’. This misleading information is being deliberately peddled by some claims management companies, which are trying to drum up commercial business and get up-front fees from people struggling to keep up with payments or trying to get their money back from the banks. People from the same companies regularly come to this forum, either to copy systems that are offered free of charge here, or to tout for business by posting misleading information and links to commercial services.
This forum has no connection with these firms, and the following links to press articles offer some insights into the way that these firms operate and the actions being taken against them.
There are indeed many pre-2007 credit agreements that are flawed – or do not exist – and details are given in a sticky in the Credit Agreement forum called ‘Consumer Credit Agreement FAQs’ here
That thread provides guidance on how to obtain a credit agreement, what makes an agreement unenforceable and how to challenge one. The purpose of this thread is to provide guidance on the ‘writing off debt’ concept, to save helpers having to keep answering queries about this from members and casual visitors.
Even if an agreement does not exist or is flawed, it makes the agreement ‘unenforceable’, which means that the debt cannot normally be enforced in a court of law where the creditor might try to get a CCJ against you, probably with a view to securing the debt against your property through a Charging Order. The debt still exists and you expect that the creditor would still chase you for it. If you fail to make and uphold a repayment arrangement, then the creditor will typically engage a debt collection agency to chase you and also register damaging data against you on your credit file.
The legal position is that the debt still exists and the only way that it can be ‘written off’ is if you make some agreement with the creditor to make a full and final settlement on the account.
If the debt is unenforceable, then you are obviously in a strong position to negotiate a significant reduction in settlement. In this case, you should always make sure that any unlawful charges (and interest on them) added on to the account are removed from the balance before you start negotiating, as they are your money and not owed to the creditor. You can also request that any default be removed from your credit file as part of the settlement. Firms often pretend that they are legally bound to keep defaults on record, but this is completely untrue and they have discretion to remove them, as they have no statutory right to file defaults anyway.
Members can undertake all of the processes mentioned above with the help of the forum and you can do anything that a credit management company can do on your behalf, without handing over money.
If you are reading this thread because you thought that you could get the debt written off then please note that this is not possible and if you want to look into this yourself, then please read up on the forums and start a thread so that you can ask questions and receive advice.
If you still wish to use a claims management company, please note that we do not deal with these companies, do not publicise them and do not refer people to them, as this is a self-help consumer forum run by volunteers for our members. We do not have the time or the inclination to answer any more queries on this subject, so if you want to pursue commercial services, please deal directly with the many companies that offer these services.