According to reports the decision on a test case relating to debt repayments is set to be made early next year, and once the decision has been made the fate of around 100,000 borrowers who are trying get rid of their debt will have been decided. Like the recently decided bank charges test case, which was started in January 2008 and has only recently been concluded after the banks appealed to the Supreme Court, the current High Court test case into repayment of debts could end up going further.

The test cases relate to borrowers who are trying to escape their debt by stating that lenders have breached regulations relating to the Consumer Credit Act. Many borrowers have refused to make repayments on their debts because of this, and the test case is designed to determine whether the cases have merit. If the judge decides that they do then this could enable many more borrowers to escape their debts under the same claim.

The claim that the cases are making is that the lenders have not been able to provide them with a copy of the original loan or credit agreement, which is something that they are supposed to be able to do under the Consumer Credit Act. Many are claiming that because the lender has been unable to provide this the debt is not enforceable and have therefore refused to make repayments on the loans.

The Office of Fair Trading has said that some borrowers have become too reliant on technicalities that they think may get them out of debt, but which may not actually be effective. The OFT said that in some cases consumers had been subject to misleading information, adding: ‘As a result, numerous disputes have been generated over whether a request has properly been made, whether the duties have been complied with and whether as a consequence the agreement can be enforced.’

Related posts:

  1. Claims for cancellation of debts may be put on hold
  2. Warning for solicitors over debt clearance firms
  3. Get your debts under control this year
  4. Homeowners can be forced to sell even for unsecured debt
  5. Some credit card interest rates may not be legal

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