G E Money - in court 9th Feb ADJOURNED

[Tweeney]

Hi all.

 

I have posted in the "mortgage and secured loan section" before looking further down and finding this section, so sorry for duplication.

 

I have been reading various posts on this site and this it is fantastic the way you can offer so much advice to people to help with their situation, and hope you can do the same for me.

 

Basically, I took out a regulated loan with G E Money in 2002 for under £25,000 so it was governed by the CCA. As I'm self employed, my income has decreased drastically over the past 6 months or so, hence, my secured loan has fallen into arrears. I have paid what I can, when I can, but basically the arrears are £1583 and I am being taken to court on 9th Feb for repossession hearing.

 

I am in a mad panic. I am married, but the mortgage is just in my name. My husband is in the same boat with regards to income as his hours have been reduced. We basically don't have enough income coming in to pay all the bills and the required payments on unsecured loans and mortgage.

 

I have spoken to the CCCS and done an income & expenditure breakdown. I have written letters to all my non priority creditors asking them to accept a token payment for £1, so hopefully they will accept this. I am looking at taking a 2nd job so should be earning up to an extra £400 per month.

 

I contacted G E Money on a number of ocassions, explaining my situation. The last phonecall I made, I was told that it was going to litigation, but not to worry, and just pay what I can when I can. Next thing is, I get a letter from Eversheds about the repossession hearing!

 

I have heard that some CCA agreements aren't enforceable. I have found a template letter on this site requesting a copy of my original CCA, which I will request. I also asked G E Money if they could capitalist the arrears and extend the term of the loan in order to reduce the monthly payments. I was basically told a flat "no" but not given a reason. I read somewhere that the judge had the authority to change the terms of the agreement.

 

I was wondering the following:

 

• What information will I need to prepare to take with me in my defence?
  
• How can I tell if the CCA is unenforceable?
  
• If I can't afford any extra to pay towards the arrears, will it be likely that I will lose my house?
  
• Can the judge ask for the terms of the CCA to be changed so I can have a longer term to pay the payments, therefore, freeing up some money to contribute towards the arrears?
  

I have been looking at so much information, I feel like my brain is about to explode but I still don't know what I'm doing.

 

I have seen Ell-en has been so helpful to many people and they have resulted in being able to postpone the repossession.

 

I'm hoping for some guidance please. I don't know where else to turn. CCCS basically said I need legal advice and I didn't have any income to offer G E Money so I would have to earn more income!

 

I am grateful for any assistance.

[Ell-enn]

Hi there, if you reduce the payments on your other creditors to token ones, are you able to make the normal monthly installment to GE?

 

If so, you could write and ask them to add the arrears onto the end of the loan terms. Unfortinately the judge cannot change the contractural terms of the mortgage, only GE can do that. However, under the new government guidelines for mortgage arrears, GE will have to prove that they have explored every option with you in an attempt to come to an arrangement, before they take court action.

 

By writing to them and asking for their assistance you can prove to the court that you have tried to come to an arrangement.

 

Have you returned the defence form to the court yet - the form is an N11M- and should have been delivered with the claim form advising of the hearing date. If you have not returned it yet then I can help you with it.

 

You say this is a secured loan - do you also have a first mortgage, if so are payments up to date?

 

Do you have any children?

 

As soon as you answer the above questions, we can get to work on what to do next.

 

Kind Regards

 

Ell-enn

[Tweeney]

Hi Ell-enn

 

Thanks for your response. I have an arrangement with my first mortgage company to pay extra to clear the 1 months arrears.

 

I have asked G E Money to capitalise the arrears and add it to the balance, but they refused. I have written to all my creditors offering token payments. Even if I can pay them £1 per month, it is still tight money wise to be able to afford the monthly payments for G E Money. Problem is that with being self employed, my income is very unreliable as to what I will receive.

 

I haven't filled in any forms yet. Didn't really know where to start! I was thinking of making an appointment at my local CAB to go through the forms, but then found this website and throught I would try here first.

 

I don't have any children.

 

Thanks Ell-enn

[Ell-enn]

Hi, the best option at the moment is to write to GE and ask for either

 

a payment holiday of 6 months to get you back on your feet, or

to capitalise the arrears to the end of the mortgage term, or

to reduce the interest rate and therefore the payments, for 6 months (Very unlikely!),

 

 

You need to get your request to them in writing and a written response from them before the court hearing. As it is very unlikely that they will reduce the payments and the judge cannot order that - your best bet would be the payment holiday or capitalisation.

 

I have affixed the budget sheet we normally use which you will need to send with the letter to GE. When you have completed it let me know what you can afford to pay GE (this should be the amount left over after everything else has been paid) and I'll draft a letter.

 

We have a little time before you have to send the defence papers back to court so let's see what comes back from their letter.

 

Kind Regards

 

Ell-enn

Budget Sheet.xls

[Tweeney]

Thanks Ell-enn.

 

I have been looking throught the Court papers, and on the N11M defence form, it says about a regulated consumer agreement and asks:

 

1. Do you want the court to consider whether or not the terms of your original loan agreement are fair?
   
2. Do you intend to apply to the court for an order changing the terms of your loan agreement (a time order)?
   

I then looked into what a time order is, and found the following information:

 

Time Orders - Free Help and Advice

 

A Time Order is a Court order a debtor can apply for to make changes to the terms a credit repayment agreement with a lender.

A Time Order can be used to reduce repayment and interest rates on a credit agreement.

Time orders are normally a temporary measure. For example, if you are likely to be able to return to making full payments or are in the process of setting up an IVA.

Stopping Repossession

 

A time order is particularly useful if you have a secured loan and your lender is threatening to repossess your home.

Maximum Debt for a Time Order

 

Time orders only apply to borrowing if your credit agreement is regulated by the Consumer Credit Act 1974. Time order cover loans:-

• up to £15,000 for credit agreements before 1st May 1998.
  
• up to £25,000 for credit agreements after 1st May 1998.
  

When can I apply for a Time Order?

 

• When a Default Notice, Calling in Notice or Termination Notice has been issued by your lender. The lenders can issue a default or termination notice and call in the loan if you have broken the terms of the credit agreement.
  
• When court action has been taken
  If a creditor has started court action against you may apply for a time order to stop any potential ruling against you.
  

 

I was wondering if you had heard of this before and if it would help?

 

I'll fill in the income & expenditure sheet.

 

Thanks Ell-enn.

[Ell-enn]

How much is the loan for and what year was it taken out?

 

Ell

[Tweeney]

It was £21,500 taken out in 2002 (taken from the court papers)

 

It is now saying that the total amount to pay it off on 4th Feb including costs is £22,424.60. Considering I have been paying for 6 years, this seems a bit steep!!

[Tweeney]

Ell-enn, I have a big problem......... on doing the income and expenditure, as my self employed income had dropped so much, even with paying £1 to creditors, I don't have any left to offer to pay off arrears.

 

Do you think that I will get repossessed if I can't offer anything? What about offering just £10. Would that help?

 

So, so worried now.

[Ell-enn]

How much is your normal monthly payment to GE?

[Tweeney]

It was £277 last year, but has increased to £301 from this month. I have attached a draft which I was thinking of sending to GE. Could you give me your thoughts on it please!

Letter to GE.doc

[Ell-enn]

In essence it's fine but a bit too long (they won't read half of it) and a bit too nice lol. I'll have a play with it tomorrow and let you have some suggestions if you don't mind?

 

Ell

[Tweeney]

Thanks Ell-enn. Will also need help with the N11M form as I'll have to get that off to the court early next week. Tried to get an appointment with CAB, but they're all booked up!

 

I'm worried that if I can't make an offer of something off the arrears, that the repossession won't get suspended.

 

Your help is really invaluable to me as you are my only source of support at the moment.

 

Thanks so much.

[Ell-enn]

No problem - we'll get there in the end:) I'm going to ask one of the team who know more about time orders than I do for advice on how to proceed.

 

Ell

[Tweeney]

Thanks Ell. I really appreciate your help.

[Barclaysbunny]

sub -

[Tweeney]

Ell - any luck with the time order and the letter for GE? Sorry to pester you. You are so helpful.

[Sparkie1723]

Hi Tweeney,

 

Please look at section 140 of the new CCA Act (amendments) 2006 ....as of 6th April 2008 your agreement is drawn into this section..............under this section the Judge has the power to do practically anything he sees fit.

 

sparkie

 

Unfair relationships between creditors and debtors

 

46.

Section 19 inserts a new section 140A after section 140 of the 1974 Act.

 

Section 140A(1) enables a court to make an order under the new section 140B, inserted into the 1974 Act by section 20 (see below) if it finds that the relationship between the creditor and the debtor arising out of a credit agreement, or that agreement taken with any related agreement, is unfair to the debtor. A relationship may be unfair to the debtor because of one or more of the following:

•

 

any of the terms of the agreement or any related agreement;

 

•

 

the way in which the creditor has exercised or enforced any of his rights under

 

the agreement or any related agreement;

•

 

any other thing done (or not done) by, or on behalf of, the creditor (whether

 

occurring before or after the making of the agreement or any related

agreement).

47. The court may take into account all matters it thinks relevant (including matters relevant to the debtor and to the creditor) in determining whether a relationship is unfair. This may include anything done or not done on behalf of or in relation to the creditor’s associates or former associates (as defined by section 184 of the 1974 Act).

 

 

Why should this matter to creditors?

These changes are significant for creditors because where a court determines that a relationship is unfair, it can make a wide range of orders.

Among them are:

· requiring repayment of all or part of any sum paid by the debtor or any guarantor by virtue of the agreement or any related agreement2;

· requiring the creditor to do or not do anything specified in the order in connection with the agreement;

· setting aside all or part of any obligation of the debtor or any guarantor as a result of the agreement or related agreement;

· altering the terms of the credit agreement;

· directing the return of property given as security for the agreement.

 

The unfair relationship provisions – which are wider in scope and give the courts more discretion - will take the place of the existing “extortionate credit bargains” under the Consumer Credit Act.

 

The Office of Fair Trading recently published guidance (available on its website) indicating how it expects the unfair relationship provisions to interact with its own powers under the Enterprise Act. Under these powers, the OFT can bring proceedings against businesses that breach their legal obligations and by doing this harm the collective interests of UK consumers, whereas the unfair relationship provisions are a route for individuals themselves.

Although recognising that it is ultimately a matter for the courts, this guidance gives examples of conduct and practices which the OFT considers could contribute to or give rise to unfair relationships.

 

How will a court determine whether a relationship is unfair?

A debtor or surety (such as a guarantor) can invoke the court’s powers to determine whether a relationship is unfair. The debtor or surety can make an application without any existing proceedings.

Alternatively, an order can also be made at the instance of the debtor or a surety where there are court proceedings between the debtor and creditor: (a) relating to the enforcement of the agreement or any related agreement; or (b) where the amount paid or payable under the agreement or any related agreement is relevant.

When a debtor or surety alleges an unfair relationship, it is for the creditor to prove to the contrary.

There is no precise definition in the legislation of what is an “unfair relationship”. A court can determine that the relationship arising out of the credit agreement (or the credit agreement taken with any related agreement) is unfair to the debtor because of any one or more of the following:

· any of the terms of the agreement or any related agreement. This could include terms requiring the debtor to pay a disproportionate amount as compensation for his breach (for example by way of default charges or termination sums);

· the way in which the creditor has exercised or enforced any of its rights under the agreement or any related agreement. This could include heavy-handed debt collection practices;

· any other thing done (or not done) by or on behalf of the creditor before or after the agreement (or any related agreement) was made.

This could include the nature of the creditor’s advertising, misrepresenting the terms of the contract or applying unreasonable pressure on the debtor to sign it.

 

The court can take account of all matters it thinks are relevant. It is likely that the courts in determining unfairness will look to the meaning of ‘unfair’ in other legislation, such as the Unfair Terms in Consumer Contracts Regulations 1999. If so, they are likely to look at whether there is a significant imbalance between the parties rights and obligations to the individual’s detriment and also whether there is generally fair dealing. Not every one-sided provision in an agreement will necessarily lead to there being an unfair relationship.

A particular concern is the scope for conflicting court decisions given the breadth of the discretion and lack of a categorical definition of what is an unfair relationship.

Only time will tell whether debtors will use these new provisions any more widely than the current extortionate credit bargains have been. However, creditors would be wise to review the terms of their credit agreements and their operations in light of them.

1 This exemption includes consumer credit agreements secured by a land mortgage where the creditor is making the agreement as a regulated activity under the Financial Services & Markets Act 2000 and certain home purchase plans.

2 A related agreement includes (among other things) a credit agreement consolidated by the main agreement and security provided in relation to the main agreement

 

“Unfair relationships

140A Unfair relationships between creditors and debtors

(1) The court may make an order under section 140B in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement (or the agreement taken with any related agreement) is unfair to the debtor because of one or more of the following—

(a) any of the terms of the agreement or of any related agreement;

(b) the way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreement;

© any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement).

(2) In deciding whether to make a determination under this section the court shall have regard to all matters it thinks relevant (including matters relating to the creditor and matters relating to the debtor).

(3) For the purposes of this section the court shall (except to the extent that it is not appropriate to do so) treat anything done (or not done) by, or on behalf of, or in relation to, an associate or a former associate of the creditor as if done (or not done) by, or on behalf of, or in relation to, the creditor.

(4) A determination may be made under this section in relation to a relationship notwithstanding that the relationship may have ended.

(5) An order under section 140B shall not be made in connection with a credit agreement which is an exempt agreement by virtue of section 16(6C).”

20 Powers of court in relation to unfair relationships

After section 140A of the 1974 Act (inserted by section 19 of this Act) insert—

“140B Powers of court in relation to unfair relationships

(1) An order under this section in connection with a credit agreement may do one or more of the following—

(a) require the creditor, or any associate or former associate of his, to repay (in whole or in part) any sum paid by the debtor or by a surety by virtue of the agreement or any related agreement (whether paid to the creditor, the associate or the former associate or to any other person);

(b) require the creditor, or any associate or former associate of his, to do or not to do (or to cease doing) anything specified in the order in connection with the agreement or any related agreement;

© reduce or discharge any sum payable by the debtor or by a surety by virtue of the agreement or any related agreement;

(d) direct the return to a surety of any property provided by him for the purposes of a security;

(e) otherwise set aside (in whole or in part) any duty imposed on the debtor or on a surety by virtue of the agreement or any related agreement;

(f) alter the terms of the agreement or of any related agreement;

(g) direct accounts to be taken, or (in Scotland) an accounting to be made, between any persons.

(2) An order under this section may be made in connection with a credit agreement only—

(a) on an application made by the debtor or by a surety;

(b) at the instance of the debtor or a surety in any proceedings in any court to which the debtor and the creditor are parties, being proceedings to enforce the agreement or any related agreement; or

© at the instance of the debtor or a surety in any other proceedings in any court where the amount paid or payable under the agreement or any related agreement is relevant.

(3) An order under this section may be made notwithstanding that its effect is to place on the creditor, or any associate or former associate of his, a burden in respect of an advantage enjoyed by another person.

(4) An application under subsection (2)(a) may only be made—

(a) in England and Wales, to the county court;

(b) in Scotland, to the sheriff court;

© in Northern Ireland, to the High Court (subject to subsection (6)).

(5) In Scotland such an application may be made in the sheriff court for the district in which the debtor or surety resides or carries on business.

(6) In Northern Ireland such an application may be made to the county court if the credit agreement is an agreement under which the creditor provides the debtor with—

(a) fixed-sum credit not exceeding £15,000; or

(b) running-account credit on which the credit limit does not exceed £15,000.

(7) Without prejudice to any provision which may be made by rules of court made in relation to county courts in Northern Ireland, such rules may provide that an application made by virtue of subsection (6) may be made in the county court for the division in which the debtor or surety resides or carries on business.

(8) A party to any proceedings mentioned in subsection (2) shall be entitled, in accordance with rules of court, to have any person who might be the subject of an order under this section made a party to the proceedings.

(9) If, in any such proceedings, the debtor or a surety alleges that the relationship between the creditor and the debtor is unfair to the debtor, it is for the creditor to prove to the contrary

[Sparkie1723]

In their guidance to this section the OFT have stated quite clearly.

"Debtors may find this useful in repossession claims and enforcement".

 

sparkie

[Ell-enn]

Hi Tweeney, hang on - I'm just in the middle of getting the right info for a time order application, and I'll get the letter to you later today.

 

Just need to make sure we're doing the right thing, in the right order etc.

 

Ell

[Ell-enn]

Hi there, I have affixed the letter which you should send to GE money tomorrow by special delivery. Also send a copy to Eversheds with a covering letter saying:

 

Dear Sirs,

 

Your Ref: (will be on their letters to you)

 

Affixed for your information is a copy of the letter sent to GE on 19th January by special delivery.

 

Yours faithfully,

 

 

XXXX

 

Enc.

If they do not reply positively to your request we will then submit the N11M together with a N400 asking for a time order. (You can submit your defence up to 7 days before the hearing, or indeed on the day to the judge in person).

 

Ell-enn

Tweeny etter.doc

[Tweeney]

Sparkie - thank you so much for all that information. It gives me a bit of hope to know that there may be something that the court can do to alter the terms of the agreement. Hopefully, all is not lost yet!

 

I really do appreciate all the help on here. I wouldn't be able to cope without it.

 

Ell - thank you so much for doing the letter for me. I am in the middle of finishing income & expenditure form, and will get it off special delivery with the letter.

 

You are wonderful

[Tweeney]

Letter and income & expenditure sent to GE today special delivery and a copy to Eversheds.

 

Fingers crossed they come back to me.

[Tweeney]

Received a letter from Eversheds today, saying that they have referred to their client (GE) and said they are willing to adjourn the hearing on 9th Feb for 2 months, on the condition that the current monthly instalment is paid in full before 5th Feb. If it isn't, they will continue with the hearing and seek an order for possession in 28 days.

 

At least I have a couple of months before court. Just have to make sure that I have the money for the instalment!

 

Many thanks to Ell - I think it was her letter and help that has helped me for the next couple of months.

 

Thanks to all. You are wonderful.

[Ell-enn]

Hi there, one more thing - ring the court and check they have adjourned the hearing - just to be on the safe side. It has been known for lenders to say they are adjourning the hearing and then "forgetting" to do it!

 

Ell

[debbbbsy]

Hi Tweeney, well done so far.

It is now saying that the total amount to pay it off on 4th Feb including costs is £22,424.60. Considering I have been paying for 6 years, this seems a bit steep!!

 

Your loan was £21500, youv'e been paying for 6 years, & you still owe more than you borrowed.

You said you were going to do a CCA request, I would defenitely recommend you do a SAR asap. You need to challenge this figure, it must contain excessive interest & charges.

 

Debs