Can I Really Sell My Debt?
Can I Really Sell My Debt?
Q: I have come across a website (linked to a program I saw on panorama last year) that is offering to buy my credit cards debts (if taken out before april 2007)
They tell me they are so sure they can wipe off my debt they are prepared to buy it! I do have to sign to say that any money they can claim back in unfair charges becomes theirs.
The company said they legally buy the debt so it's not ours any more. They give us sample letters to send to credit reference agencies and each credit card to say that we no longer own the debt and in future they should contact the company. We pay them £349 plus 10% of the debt and they pay us £1 to say they have legally bought the debt. It then becomes theirs to do with as they will.
A: We've seen this offer. We don't know much about it but it seems very unlikley doesn't it.
Firstly in most loan contracts the lender reserves the right to pass the debt on but the borrower is prevented from doing so.
Secondly, what do you think will happen if the debt collector comes to the door and you show him a piece of paper saying that the debt is not yours any more. You think that he will say "OK, sorry to have troubled you?". You think that the debt colectors won't then put a default on your file or that the CRAs will refuse to accept the default or will later on agree to remove it?
Finally, even if you can sell on debts to a third party like this, you can sell the rights under the contract but not the duties. This is why you can still claim your bank charges back from your bank even though they have sold the debt on.
In fact you won't be able to reclaim your charges from the new owner of the debt. You will be obliged to collect them from the orginal debtor/creditor.
If you want to get yourself in serious trouble, believe that you have sold your debt on, stop making any payments and wait and see what happens.
You will be under seige from debt colelctors, harassing phone calls, court actions, charging orders, repossessions, bailiffs.
Your credit file will be blighted for the foreseeable future. You wil lose your home, family security. You will have given away everything for a lousy £349 or whatever you receive. A mess of potage or 30 pieces of silver or whatever mixed up inappropriate token that you want to settle for.
In short. Don't do it.
Wait until someone else does it and comes back and tells us all that I was wrong and that it really is just a brilliant idea and that it is amazing that no one ever thought of it before and that this scheme has revolutionised the idea of a free lunch.
Fact 1 - Any company that does not hold a Consumer Credit Licence cannot legally buy, sell, or do anything with a regulated Consumer Credit Agreement.
Fact 2 - In any case, a debtor cannot "sell" his debt to anyone without the agreement of the creditor - and that is hardly likely to be forthcoming.
Fact 3 - There are many solicitors firms around that will take on cases where an Agreement is likely to have been improperly executed and may be unenforceable. Providing these companies hold a Consumer Credit Licence, and are properly regulated by the Law Society, then you have a sporting chance of getting proper legal advice and help.