Unenforceable Debt

    As you probably already know, debt is a complex thing, with many different types and conditions surrounding various debts it can be difficult to keep track of everything! But if this distresses you, don’t be too upset, as you may be able to effectively write off some of it before taking any further action.

    The general properties of an enforceable debt are that you still owe money, but the creditor cannot take you to court, take any possessions you bought with the loaned money or take away anything used as security when taking out the loan. Specific circumstances can change this, but generally these conditions apply to all unenforceable debt.

    I’m talking about unenforceable debt. This is a debt which a debt collector or lender cannot chase you for, and must be legally written off. This article will be explaining what qualifies as ‘unenforceable’ and what you have to do if you’re being chased for debts you don’t need to pay.

    If a debt is over 6 years old, or 5 years in Scotland.

    If a debt exceeds 6 years in age, or 5 years in Scotland, then you no longer have to pay that debt. The lender can no longer force you into paying money, this is known as ‘Statute Barred’ debt. The time until a debt reaches statute barred status is measured from the first time you failed to make a payment.

    In this time you must not:

    • Say in writing that the debt is yours, as it may be seen as proof you agree to owing money to the lender, and they may reset the 6 year clock on your loan.
    • Be taken to court by the creditor over the payment, as this would force you to obey whatever legal action is leveled against you.

    Be careful of Mortgages and joint debts, however. A Mortgage isn’t Statute Barred until 12 years have passed (although interest is enforceable after 6 years), and in a joint debt either one of you could reset the debt clock for both of you if either makes a payment.

    If you didn’t borrow the money

    This one should be fairly self-explanatory: if you didn’t borrow the money, you don’t have to pay. You’re not responsible for a loan if your name is not recorded on the credit agreement, although you could be asked to pay out the full cost of a loan in a joint agreement if the other party stops paying.

    If the lender still chases you over the paymanet, ask them to prove the debt is yours. You do not need to provide proof that it is not yours, and if they cannot provide proof that you signed an agreement, then you don’t need to do anything and the lender must stop chasing you for payments on the affected loan.

    If you were pressured or bullied into signing

    You can complain to a lender if you feel you were bullied, pressured or otherwise persuaded against your will to sign an agreement you didn’t nessecerally wish to sign. This will require some form of proof, and you may wish to seek specialist assistance if this is the case, but you can get a debt written off if you can prove you did not sign of your own free will.

    Also, there is a 14 day ‘cool off’ period at the start of credit agreements, during this time you can cancel without the need of a reason. You can still seek specialist assistance to get the debt written off if you miss this window, but it is the quickest way to make a debt unenforceable.

    If you couldn’t (or didn’t) understand what you were signing

    You can complain to a lender if you couldn’t understand what you were signing at the time of signing an agreement. This could be due to: learning difficulties, mental health problems, dementia or the influence of drugs and/or alcohol. You can complain on another person’s behalf for the same reason if they are unable to make a complaint.
    Medical evidence may be required in such a claim, and is recommended when making a complaint of this nature, although alibis may be enough to see the complaint approved and debt written off.

    You were under 18 (under 16 in Scotland) when you signed the agreement

    Most lenders will not do this, but it is not legal to lend money anyone under 18 (or under 16 in Scotland). Anything you pay will not be given back to you, but you can immediately cancel the agreement at any time, provided you do not turn 18 before doing so.
    You can write to your lender to complain that you are under the legal age and wish to cancel, once they have the letter, if they don’t respond within 8 weeks or refuse to cancel the you can report the lender to Financial Ombudsman Service (FOS).

    If you have a child, you are not responsible for any debt they may have. If your child lied about their age, they are no longer responsible for their debt but may be prosecuted for Fraud. The same is true if you were under 18 and lied about your age when signing an agreement.

    If you believe your debt is owed to a loan shark

    Lending money for profit is not legal without permission from the Financial Conduct Authority. Without this permission they are an illegal lender, or ‘loan shark’.
    If you’ve verified your debt is to a loan shark, you should report them immediately to the Financial Conduct Authority, they have no right to force you to pay money as the loan is illegal but you may still continue payments if you are concerned for your safety.

    If the debt is not what you agreed to

    Always check the details in any agreement, and if you find your credit agreement isn’t what you thought it was, then you might be able to cancel the agreement as invalid. If it is in the 14 day cool off period present in most agreements, you should be able to cancel without any complications.
    If you attempt to cancel outside of this 14 day window, you must prove there is something wrong with the credit agreement. This can include:

    • Incorrect amount shown to have been borrowed
    • Incorrect details of payment – how often, how many and/or how much
    • Incorrect or misleading rate of interest or interest variance
    • An incorrect ‘APR’ – This being the annual cost of the loan including interest and fees.
    • Incorrect ‘full amount repayable – outlining the total you will pay, or the original amount plus interest
    • Incorrect or missing terms and conditions of the agreement
    • Incorrect or missing information regarding cancelling the agreement – along with any fees this may incur
    • Missing signature by yourself and/or the lender
    • If any of the above are true, the debt may no longer be enforceable and may be canceled, although when it was signed can have an effect on this.

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