News Tristan on 19 Dec 2008 07:23 pm
How Can Debts Get Written Off?
I was speaking with a friend earlier who has decided to get involved with a company that write off unsecured debts. They are not an insolvency company, so they are not putting in place an IVA or bankruptcy, they are taking creditors to court. In doing so, they are winning compensation for their clients on contracts that are not in line with the Consumer Credit Act, as far as I understand it.
I can’t make my mind up on whether this is a brilliant idea or just a little bit immoral, as from what I can make out, the spirit of the contracts are fair, but they seem to be winning the compensation largely on technicalities, but isn’t it always that way when dealing with anything legal…
Granted, I did write a post recently on how to get out of debt quick, (which was a bit of a rant about how greedy bankers and lenders have got us into this current predicament, and therefore we shouldn’t feel too bad about using IVA’s or bankruptcy as a way of writing off debts) which would suggest that I would be all in favour of using recent changes in legislation to deem credit contracts unenforceable and thereby claim compensation to get the debts written off, however, this method seems too good to be true, what’s the catch?
The way I see it, if you are going to use an IVA or bankruptcy to get your debts written off, it comes at a price, namely a ruined credit record for at least three years, but more probably six years (until such time that it will be wiped from your credit file). By simply suing the creditors and getting the contracts judged to be unenforceable, and winning compensation to get the debts written off, it strikes me that there’s no pain for those that have their debts written off, and therefore, a large chance that they will not learn a lesson from the experience, and thus get themselves into a similar mess a few years down the line.
Maybe I’m being old fashioned in my thinking, however I can’t help but think that when someone commits a crime and is found guilty, they have to serve a sentence. By using this method to get debts written off, it’s like robbing a bank, getting caught, and then being let off on a technicality, we wouldn’t stand for it in those circumstances, would we?
