Court of Appeal close debt write off loophole

19/11/2009

A Cheshire couple who hoped a legal loophole would enable them to wipe their debt of £40,000 has been closed by judges at the Court of Appeal.

Michael and Suzanne Walker fell into arrears after they remortgaged their home and faced repossession until a judge ruled in April, that it was unenforceable.

The ruling was made on the fact that the amount of credit they secured was £17,500, however a "broker administration fee" of £875 was added to the total and this led to the challenge because if the amount of credit is incorrectly stated, the agreement is unenforceable.

However the appeal judges said the ruling at Cheshire County Court had led to a "spate of consumer credit litigation" and the lenders, Southern Pacific Personal Loans, had faced more claims of irrecoverable loans from other borrowers.

After the recent ruling, the Walkers now face losing their home in Sandringham Close, Winsford, and legal costs from the loan company of £100,000.

• Share
• 
• 
• Store
• 
• Follow
•