Court shuts debt legal loophole

19/11/2009

The Court of Appeal has closed a loophole in the law which would have allowed a couple to write off their debts.

Michael and Suzanne Walker of Winsford in Cheshire fell into debt after remortgaging their home, the Press Association reported.

A judge ruled in April that their credit agreement was unenforceable, meaning that the couple avoided having their home repossessed.

But last week, an appeals court determined that Cheshire County Court's ruling had resulted in a "spate of consumer credit litigation".

The lender, Southern Pacific Personal Loans, also had to cope with more irrecoverable loan claims from other borrowers.

Lord Justice Mummery, the appeals judge, was quoted by the news agency as saying that the latest ruling "will affect other cases in the current spate of consumer credit litigation and potentially many other credit agreements".

He added that consumer credit law is complex and that the county court judge's decision to rule the Walkers' debt as unenforceable was incorrect.

Tags; Debt Management and Banking,

Regional Debt Advice; Debt Help Cheshire, Debt Advice Winsford,

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