Consumers are advised to seek independent legal advice before using the services of claims management companies that offer to find ways to render consumer credit agreements unenforceable.

Businesses can only provide claims services if they are authorised and regulated by the MOJ under the Compensation Act 2006. Such businesses may also need to hold an appropriate OFT consumer credit licence.

Consumers may be asked to pay large up-front fees, often up to £500, for the businesses to review their credit agreements. Some businesses are claiming that many of these agreements are completely unenforceable, that consumers can have debts cancelled and claim back thousands of pounds. Customers are then being asked to pay large fees if the claim is successful, meaning that they are still in debt.

Consumers should think very carefully before committing themselves to making claims and handing over hundreds of pounds in advance to do so, even where refunds may be promised if the claim is unsuccessful.

The best advice is to go directly to a solicitor, as they will not want to charge such excessive fees up front, and should not charge any fees at the end of your case. At Goddard Smith Solicitors we specialise in writing off debt. There are many ways to do this and by completing our free questionnaire we will be able to advise you fully about how to find out if your loans and credit card agreements can be cleared  

Mark Smith

Can you really ‘write off’ a Credit Card or Loan? The truth behind the hype.

Over the last few month there has been a lot said about writing off credit card debt or loans, legally. But is it really true that these debts can simply be written off? Well, actually, no.

Below, Mark Smith, from Goddard Smith Solicitors, who have won several settlements and a trial against high street lenders, explains how it really works.

“What all of the companies offering a debt “write off” service are talking about is actually a request to the court to confirm that the credit agreement cannot be enforced against the borrower. This means that if an individual successfully asks the court to confirm that the debt could not be enforced, they could choose to stop paying the debt. The lender then can no longer use a legal mechanism to enforce the debt against them. This means no CCJ’s, no charges on any property, no bailiffs and no bankruptcy petitions.

Many people are skeptical about this, as the old adage goes, ‘if it seems too good to be true it probably is’. Well not in this case. The law in this area is quite technical, and it must be stressed that if you intend to look into this, you should go directly to a solicitor, and not go through any type of third party organisation, as not all being very open about what can be achieved.

The legal bit

Put as simply as possible, if a person has taken out a loan or a credit card before April 2007, for a value lower than £25,000, there is the possibility that that loan or credit card agreement will be declared to be unenforceable by the court.

The law states that if the original credit agreement, as signed by the debtor, fails to comply with section 65(1) of the Consumer Credit Act 1974, relating to improperly executed agreements, then the agreement is ‘improperly executed’. This term means that the agreement was not properly constructed and signed in the first place. If a lender wishes to enforce a debt, which has arisen from an improperly executed agreement then the lender must obtain a court order.

However there are certain rules that the lender must comply with, and if he does not, he will not be entitled to a court order, and therefore the debt will not be enforceable against the borrower. The signed credit agreement must provide certain information and that information must be correct. The credit agreement has to state the total amount borrowed and the correct rate of interest payable on the credit. There are other requirements, such as whether the signature and cancellation requirements have been met, which must also be followed. Essentially though, where information is omitted or inaccurately displayed on the credit agreement, the credit card or loan agreement is unenforceable.

Further if a person was told that they had no option, or were just given a payment protection insurance policy (PPI) it was probably miss-sold to you and the miss-selling of this product may also render the loan unenforceable.

Does this mean the debt is written off?

Not exactly, the debt still exists, and it just sort of sits around in the background. However it cannot be enforced against the debtor. So if the debtor then chose not to pay the debt, the lender could do very little about it. This is similar to an illegal gambling debt (only without the threat of a baseball bat).

Beware

If you would like to challenge an agreement, seek suitable legal advice directly from a specialist solicitor, as there are many pit falls. If you were to take the lender to court for a declaration of unenforceability on your own, and you lost, you may be responsible for paying the lender’s legal fees. This can run into thousands of pounds.

Most solicitors can obtain insurance policies on your behalf to protect you from this situation. Usually you don’t need to pay for the policy upfront, and if you win the cost of the policy can be recovered from the lender. Also the policies are often designed with solicitor’s clients in mind and they are therefore ‘self-insuring’. This means that if the claim was lost the policy premium would be paid off by the insurance company as an insured risk. Therefore in most cases the person bringing the claim does not have to pay for the insurance policy, and they are protected against the lenders legal fees if they did lose the claim.”

If you would like to investigate your loan agreement further you can contact a specialist solicitor like Goddard Smith Solicitors, www.goddardsmith.co.uk.

END

GoddardSmith Solicitors are a full service law firm based in Pemberton, Wigan. They offer a full range of legal services for commercial, corporate, public sector or consumer clients. They can be contacted on 0800 160 11 44, alternatively visit www.goddardsmith.co.uk

Q My company has recently acquired a new business and 50 of its employees transferred to us under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). We want to put these employees on our standard employment contracts. What are the issues we should consider?

Kathleen Goddard replies:

A crucial aspect of the protection afforded by TUPE is that employees transfer on their existing employment terms. TUPE places strict limits on post-transfer contract change and specifically addresses when such variations can and cannot occur:

• Where the reason for changed terms is the transfer itself, TUPE makes such changes void.
• Where the reason is connected with the transfer but is also an economic, technical or organisational (ETO) reason entailing changes to the workforce, TUPE provides that such changes are effective if agreed.
• Agreed variations that are unconnected with the transfer are also effective.

An employer aiming to realign contract terms after a TUPE transfer faces an uphill struggle. The consequent contractual changes will be connected with the transfer and are unlikely to fall into the ETO reason category. As a result, straightforward post-transfer harmonisation is almost impossible. Also employees cannot contract out of the protection of TUPE and so even an employee who agrees to post-transfer contractual change can subsequently change their mind and seek to rely on their previous employment terms such as, for example, entitlement to an enhanced redundancy payment.

Some practical solutions for an employer determined to implement a post-transfer harmonisation exercise are:

• To avoid unfavourable changes and, if possible, equalise terms upwards
• To implement new terms for all employees (and not just those who have transferred) and/or to delay implementation with a view to breaking the link with the transfer
• To ensure employees have a genuine choice whether or not to accept changes so that, arguably, the reason for the variation is employee choice rather than the transfer, although this is quite tenuous.
• To terminate employment for an ETO reason and offer immediate re-employment on new terms. Potential claims arising from the termination should be waived via a compromise agreement. There is doubt as to whether such a compromise agreement would be effective, on the basis that it attempts to contract out of TUPE. Employees, however, who have signed an agreement and accepted new terms are perhaps unlikely to challenge this position later.

If you are in any doubt about all of this, speak to a solicitor, as defending an employment claim can be a very expensive process.

Senior judges rewrote the divorce laws yesterday to give resounding backing to prenuptial contracts and bring England into line with the rest of Europe. One of Germany’s richest women secured victory in the Court of Appeal in enforcing a prenuptial agreement with her former husband.

The judges said that England should not be out of step with other countries, condemning existing law — under which prenuptial contracts are not enforceable — as “patronising” and outdated.

They upheld a challenge brought by Katrin Radmacher, 39, an heiress said to be worth £100 million, ruling that a prenuptial contract should be decisive when the courts divide a couple’s assets after a marriage fails.

Until now, judges have regarded prenuptial agreements as “persuasive” but in future, courts will regard them as binding unless there is a reason not to do so.

Ms Radmacher’s former husband, Nicolas Granatino, 37, a banker who has become a student, had agreed not to make any claims on her fortune if they split up but was awarded £5.85 million for his own use by a High Court judge last year.

Lord Justice Thorpe said that any rule that prenuptial contracts are void seemed “to be increasingly unrealistic” and “reflects the laws and morals of earlier generations”. He added: “As a society we should be seeking to reduce and not to maintain rules of law that divide us from the majority of the member states of Europe.”

Lawyers said the ruling signalled the end of London being seen as the “divorce capital of the world” where people could pursue extravagant claims. Simon Bruce, family partner at Farrers, said: “English courts will now respect the agreements made by couples both before and after marriage.

“It is judge-made law, the courts plugging the gap left by government inactivity.” The ruling would help individuals to become “masters of their own future”.

Michael Gouriet, family partner at Withers, said: “This is a really significant development and shot in the arm for prenuptial contracts, with very senior judicial support for reform.”

Sandra Davis, head of family law at Mishcons, said there would be “a seismic shift” in how the courts approached prenuptial contacts.

“The legal burden will start falling on the person who wants to extricate themselves from the prenup rather than, as now, on the person who wants to uphold it,” she said.

The judges cut Mr Granatino’s £5.85 million award to about £1 million as a lump sum in lieu of maintenance for the couple’s children, with a fund of £2.5 million for a house which will be returned to Ms Radmacher when the younger of their two daughters, who is 6, is 22.

Article from “the Times Online” , written by Frances Gibb, Legal Editor

Kathleen Goddard replies:
You don’t seem to have applied for the maintenance to be reduced when your ex-wife re-married, though her re-marriage in itself would probably not be sufficient to apply for a reduction. You have effectively ruled it out by not asking for it at the time.

But the birth of your second child is in a different category. If that imposes upon you new financial burdens which you will find it difficult to meet because of your continuing obligation to your first child, a judge might feel that a small reduction would be in order.

But it will depend on the precise details of your present situation and of your ex-wife. I certainly think it would be worth consulting a solicitor and seeing what he or she has to say.

It would be fair to say that for any business that opened their doors in the last 12 to 18 months, the ride would not have been an easy one.
For a new business to make it through that time unscathed would have been an achievement in itself, particularly when solicitors are professionals that have been particularly hit in the current crisis. But to go from strength to strength as they have is particularly remarkable.

Kathleen Goddard opened the doors of the firm in June 2008, starting with just one member of staff specialising in family law, while Kathleen specialises in Litigation. Looking back Kathleen admits that it was quite daunting. “I went from running a busy civil litigation department to being in an empty office and having to find business from somewhere”. Well, they did find some business, so much so that now there are 7 of them working at their Pemberton offices; and to mark that first anniversary they are opening shop on Ormskirk Road- quite literally – so that they now have a high street presence.

On a personal level Kathleen was named as a SPARK (Women’s Enterprise Ambassador Network) ambassador, recognition of her success and hard work.
Such success has come through hard work, long days, early mornings and a commitment to build a presence as a community firm. Kathleen and her business partner Mark Smith, have revived the Pemberton Trade Association, and are Trustees for the local charity Bright Future,
Kathleen also adds: “There are a lot of people I wish to thank for all the support they gave us in the last year. Without them we would have found it much more difficult to get to where we are today”.
True community spirit for a firm committed to support its own local community.

GoddardSmith Solicitors are a full service law firm based in Pemberton, Wigan. They offer a full range of legal services for commercial, corporate, public sector or consumer clients. They can be contacted on 0800 160 11 44, alternatively visit www.goddardsmith.co.uk

Spark is a campaign to bring together successful entrepreneurs and enterprise champions across the UK, who can in turn encourage women to recognise that business is for them.

The campaign is brought to life through the inspirational stories of women, which is why Kathleen Goddard has been chosen as she is already making her idea happen by opening and growing the Wigan based law firm, Goddard Smith Solicitors.

Kathleen Goddard said: “I have friends who think I am brave for opening my own business, so I am glad I have the opportunity to show women all over the North West, that they can do it too.”

Emma Thorn from Spark, said: “Women need to have realistic role models who they can look to for inspiration. Kathleen Goddard will join a network of ambassadors who together will inspire more women in their teens and twenties to take the plunge and make their ideas happen.”

There are over 1,000 Spark Ambassadors across the UK committed to telling their inspiring stories via events, school visits and the media. Their efforts will inspire women to go out and grab opportunities and connect them to others to help turn their dreams into reality.

The network is delivered in the Northwest by the Northwest Regional Development Agency and co-ordinated centrally by Make Your Mark on behalf of the Department for Business, Enterprise and Regulatory Reform. Make Your Mark is the national campaign to unlock the UK’s enterprise potential.
www.sparkambassadors.org.uk

GoddardSmith Solicitors are a full service law firm based in Pemberton, Wigan. They offer a full range of legal services for commercial, corporate, public sector or consumer clients. They can be contacted on 0800 160 11 44, alternatively visit www.goddardsmith.co.uk