Paragon secured loan, repossession action

[hillards]

Last year we had a successful claim for the PPI on this account, the story is in my thread at http://www.consumeractiongroup.co.uk/forum/showthread.php?324408-PPI-Paragon-and-eLoan(Twopart-Ltd)-***-SUCCESS-***

 

OK, quick explanation. In early 2006 we took out a consolidation loan, paying back several old debts and having a small sum to ourselves to have some urgent work done in the bathroom, everything in there was broken!

 

The company who brokered the deal went bust, hence claiming the PPI via FSCS last year. Paragon have been a pain in the rear as they started repossession proceedings last year because we were in arrears. We borrowed some money to bail ourselves out of that and when we got the PPI we paid them another lump sum, as well as paying the family member back we'd borrowed from to take the case out of court.

 

The PPI only ever covered the first 5 years of a 10 year term, and only ever covered my wife's employment, never myself. Even if we had not reclaimed this, it would have been useless by now anyway.

 

I had gone through several periods of having to work without pay, or only part time, for a few years. This was to set up a community project which eventually went full-time in late 2009 and I actually got full time pay for a year too. But, that ended in September 2011 when the funding ran out again. I found myself unemployed and falling into serious ill health.

 

I'm now in receipt of ESA and DLA and classed as disabled, I have COPD (Chronic obstructive pulmonary disease), which means it's not curable, I'll be stuck with it for the rest of my life. My chances of employment are slim as I can hardly get out of the house.

 

Paragon have been made aware of this and have had I&E details, but have again taken the court route for repossession. I had to attend a hearing earlier this month. Thanks to being out in the cold air I was then struck with pleurisy, which has limited me for the last three weeks as the antibiotics and steroids do their stuff. The hearing was adjourned as they had failed to serve some paper or other. It's been rescheduled in April.

 

So, Paragon annoyed me enough that I started to look at their paperwork. I also consulted an old thread - http://www.consumeractiongroup.co.uk/forum/showthread.php?171037-Multiple-agreements-falling-within-section-18-CCA-1974 (WARNING: 107 pages !). I realised that their 'unregulated' agreement was actually wrong, under the CCA it should have been multiple agreements. Added to which was the PPI and a selection of unlawful charges they've thrown into the pot over the years.

 

Paragon have not submitted a copy of the agreement as part of their court case so I've taken the view that I should ask why they are taking action against me. The agreement is unenforceable and flawed. How can they impose 'arrears', 'balance' and other terms ?

 

I realise that there is a danger of taking this route. Judges have been know to ask the simple question' did you have the money' and I would answer yes, we did. However, we are not looking at debt evasion here. The loan we had was £25,500, we've paid them over £34,000 to day, that's over 133% return they've had and I object to giving them any more, now that I am aware of the dodgy agreement.

 

So, I've written to the solicitors acting for Paragon and told them how I see it inviting them to withdraw the case and send me a letter to say they've closed the account. Nothing like making it simple for them to understand what I'd like them to do.

 

A previous SAR brought only limited information, no copies of letters Paragon claimed they had sent, no information about why they made two doorstep visits they charged me for, no information on the broker used or their fees either. I told them at the time that I considered the SAR insufficient, but (as usual) I never got a reply.

 

From what I've read on S18, we had a mixture of restricted use and unrestricted use. Indeed a list was drawn up by Paragon for the cheques to be raised and issued by them. As neither exceeded £25,000 I have declared the 'unregulated agreement' to be at fault.

 

Paragon have tried to tell me that they will take away the home I have lived in for the last 17 years. My wife and her daughter have lived here for 30 years. I cannot help my medical condition, it has been verified by doctors and even ATOS. We have struggled to survive since I lost my income. They have been calling and leaving message daily, despite being told that we will not discuss anything by telephone, we want it all in writing so there's no trying to make out we said anything we didn't. Too right I'm going to stand up to them !

 

In February 2011 Paragon took a much higher DD than normal, which prevented other bills being paid from the bank account. A letter arrived afterwards, thanking us for agreeing to the new amount. We never agreed to anything, so we clawed the payment back via the bank and cancelled the DD. We paid the amount we normally paid at the time and lodged a complaint with Paragon. Despite reminders they have failed to respond to the complaint and I put the account into dispute pending this being resolved. It never has been.

 

Thanks to having some time on my hands to do a lot of reading, I'm convinced that Paragon don't actually have a valid agreement on which to claim anything. They've taken court action when there is a dispute pending, as well as being ignorant of many letters sent to them.

 

I just wondered if anyone had any thoughts on potential brick walls I may hit here? I am only following what I believe to be correct and I am quite prepared to explain this to a judge if the case is not withdrawn. Remember, we have already reclaimed the PPI on this account successfully.

 

Had it not been for the negative side of unenforceable agreements being well documented here, I had even thought of suggesting that Paragon may like to pay back the £34,000 they've had off us so far...

[citizenB]

Hillard, responding to S.O.S I have moved your thread is now in the repossession forums. It is purely administrative, so you dont have to do anything

 

Will have a read of the thread to see if there is anything I can do to help..

[citizenB]

I am not quite sure what questions to ask, so I will send out some S.O.S for you and hope that people will be able to look in over the Bank Holiday weekend for you.

[Lea_HTH]

In law there is such a thing as equity. Even without an agreement (unlikely anyway), the courts will look to see what is equitable, and that would come down to whether or not you had the money and whether or not you have been making payments (accepting that you had the money and that there was an agreement).

 

My suggestion would be that you look to asking for assistance from the Mortgage Rescue Scheme - with your health issues/disability you would probably qualify (subject to other criteria which you'd find out when you apply). Obviously if you are actually in a position to make an offer of CMI plus something towards the arrears which will clear them within the remaining term of the loan, then that is also an option.

 

There doesn't appear to be any reason for you to be looking at the CCA if your loan is unregulated - it simply won't apply.

[hillards]

There doesn't appear to be any reason for you to be looking at the CCA if your loan is unregulated - it simply won't apply.

Thanks for the input.

 

One of the points I'm trying to make is that 'they' got it wrong in the first place. What they issued as an unregulated agreement should really have been regulated under the CCA as it is clear there were restricted and unrestricted amounts that formed a multiple agreement and that neither was sufficient to go over the £25K limit to make it unregulated. That is the reason why I am now arguing that they don't have a valid agreement.

 

I've also consulted http://www.francisbennion.com/1999/004.htm "'Multiple Agreements Under the Consumer Credit Act 1974 s.18'" in reaching this conclusion.

[Lea_HTH]

Was the 25.5k paid over to you in one sum?

[hillards]

Was the 25.5k paid over to you in one sum?

No, Paragon raised a number of cheques that were used to clear previous debts (restricted use) and one in my wifes name that we used to sort our bathroom out (unrestricted). The total of restrcited was under £25K. They even sent a handy list of how much and who each cheque was payable to.

[Lea_HTH]

A consolidation loan - not unusual for the lender to issue the individual cheques whilst lending one lump sum - this does not render the single loan into 'multiple loans'.

 

I don't think you'll get far with your argument. But you have the freedom to raise it in any defence to the possession claim and put them to proof, but be aware that if they succeed on that element (even if they fail on gaining possession), that you will be liable for all their costs as per the vast majority of secured loan terms and conditions.

 

Good luck.

[hillards]

Thanks again for the input.

 

Not multiple loans but multiple agreements, that's the key as there was also the PPI to consider in the original scheme of things. To me their 'agreement' is like Swiss cheese, lots of holes in it

[Lea_HTH]

That was my point - one consolidation loan = one agreement. How the money was distributed is probably going to be immaterial - they were simply repaying your debts with a single loan that you took out with them. Your PPI is irrelevant - you settled that claim.

 

In any case, as I said, you are free to raise it in your defence - just be forewarned about costs issues.

 

Good luck.

[hillards]

As already mentioned, the various (regulated) items being consolidated were less than £25K. We then had an amount of unregulated/free-use as well, which took it to the total.

[hillards]

It's court day.

 

I have called Paragon, just to check that they would still be turning up today. They say they have had my letter and have simply not responded, which is typical of them. I had also sent copies to their solicitors, the court and even the solicitor from Shelter that was there last time, as she had written to give me a summary of her dealings that day.

 

I've got to say that I felt gagged last time, the solicitor put several things forward to the judge and got them wrong, I wasn't allowed to speak to correct her. For that reason I'll politely turn down the offer this time, although I may have a chat before going in to the judge.

 

We have looked back at what we've been able to afford to pay over the last year and a half, and how much they've been adding on in interest. If they kept to the current rates we would both die before it ended

 

I really do not know what to expect. I will no doubt report back later.

[citizenB]

Hope this is a good day for you, Hillards - please let us know what happens!

[hillards]

Back from court

 

As expected, local solicitor representing them, who only picked the case up this morning

 

Had a chat with him, filled him in on events to date, his lot had not provided him with a copy of my defence so he was unable to comment on it, so I was kind enough to give him a spare. He was rather surprised he had not been warned that there was a defence. I had already checked that Paragon had had a copy when I phoned this morning, so I could happily look him in the face and point out who's fault that was. He was also without any info about the adjournment on the 11th of March and was claiming it was because I had agreed a repayment plan. Wrong, that was because they hadn't served some paperwork.

 

Anyway, in to see the judge. A different one to before so he had to catch up a bit. He accepts the defence I've submitted. He did say it wasn't in quite the right format, but that it was acceptable. He commented on my note that we accepted that we had had the money, had repaid 133.6% to date, and we not trying to use the defence to claim the money paid to date back (a pity!) - he said "so you are using this defence as a shield, not a sword" which I thought was quite good

 

As Paragon and their solicitors had not bothered to respond to my defence he is ordering that they do so within 21 days and, if they wish to proceed, he is looking to re-convene at the first available date after 28 days with a 30 minute time estimate. He did say to the solicitor for their side that if they were going to withdraw then they must do so before the hearing date.

 

I am thinking seriously of writing to Paragon, and their solicitors, to offer them an out of court settlement of £1. If any of the legal bods want to help me with this one, even if it's just advice, I'd welcome their input

 

I sent a text to the wife, don't start packing just yet... To add to the good feeling, the DWP have sent me a small payment as compensation for a telephone call to their office on an 0845 number that cost £6.45 We are on Virgin Cable, the call lasted just over an hour, I was on hold for the first 54 minutes of it.

[citizenB]

Well now, this kind of looks fairly promising, Hillard. I will flag the post above for Site team to see if they have any advice for you

[hillards]

Hmmm, a bit of advice away from CAG, but could save me a lot of bother. I should not make any offer to settle out of court as this could suggest I am liable for paying them something. So, I'll not follow that route after all.

 

Did someone lock the door BTW ? Seems very quiet around here...

[citizenB]

It has indeed been very quiet, Hillard.. not sure why

[hillards]

Just to keep the notes up to date. The judge gave their solicitors 21 days to respond to the statement and defence I had submitted, setting the final date as May 14th.

 

The post just arrived! Usual trick of the address inside not being displayed in the window of the envelope, instead it shows the start of the letter with Paragon vs and then saying they've been appointed solicitors... Postman had to rip part of the envelope to see the address to deliver to

 

There is a change of solicitors from the usual RD Shelton to Richard Pearlman LLP in London. The new solicitors are denying the points I had made and quote Plevin vs Paragon in Manchester County Court, October 4th 2012, claiming the same contention.

 

I've read the document they've sent and need to clarify a few things as something does not sound right and may be the key to my case. I've got headache with it already.

 

The next event will be a Case Management Conference before the District Judge on June 18th with an estimated time of 30 minutes.

[hillards]

And it's June 18th, so I've been to see the judge again. Such a pity they don't keep the same one on a case, this is about the 5th different one.

 

I got a bit of a telling off for trying to add new things to my defence, that were not in the copy I had submitted previously. The judge last time told me I needed to be sure of my facts and to back them up for the next hearing, which I have, but obviously didn't follow protocol. I now need to find out how to amend my defence to get the various details on record. Our court no longer operates a public counter, you have to book an appointment to see someone. I was going to call in while I was there.

 

Their solicitors moved for a dismissal of my defence and immediate issue of an order. The judge didn't allow that. He says there are some areas in the defence that prevent him dismissing it and got me to affirm that I really really really wanted to move forward, knowing that there was evidence they had submitted to refer to the Plevin case and they may add more to support their claims.

 

The case has now been allocated to the fast track with an estimate of 5 hours, with all the timetable of events in place I'm told it will be late October-ish before this next goes into court.

 

Here's where I could do with some help. I would like to use the Unfair Terms in Consumer Contracts Regulations 1999 as part of the defence, claiming that the contract is unfair in that they can try to take away someone's home for getting into arrears when they are unable to pay due to illness and not being in receipt of benefits. Without going into great detail, it took me many months from losing my job to being able to claim Disability Living Allowance then ESA. We were not 'dont want to pay' but 'could not pay' as over half our income was lost through my unemployment and illness.

 

Added to this is Section 140A of the CCA 1974. In the Plevin case I found a note to say that this gives the courts a very wide discretion to re-write credit contracts which otherwise lead to an 'unfair' relationship.

 

Part of my defence is that we have been put in a rather unfair position due to the naff PPI, the way Paragon have bulldozed this into court and our financial distress.

 

I can add more detail if anyone is willing to help, but otherwise I'll just update this thread as events unfold.

[citizenB]

Hilliard, I will try and find someone who can help

[caro]

Hi Hillard, I'm no expert but have a couple of questions. I see from your ppi thread that you only got 90% back as is standard for claims over £2k(?) that go through them. Did your refund put you back to the position you'd have been in if you hadn't had ppi? If not could that affect what you now owe?

 

I assume you've included charges in your defence?

 

I believe that you need an n244 to apply to amend your defence. That might necessitate a hearing if paragon object.

[hillards]

Just to finish this one off.

 

After a lot of expense in speaking to a solicitor and aiming to take our case forward through the court,

he consulted a barrister friend who looked over the case and informed us we only had a 51% chance of success

and that would depend on being properly represented.

By now our bit of money had run out so we had to decline.

 

Regretfully, we withdrew the case from court on the respondent's terms and are back to paying through the nose for our sins

 

Their side had a barrister and solicitor lined up,

it would have cost thousands in court costs had we lost - now we will never know.

 

Once again, the might of the legal profession waves it's mighty sword over the minions and we have little choice but to retreat.

 

Unfair in my book...

 

As for the PPI claim.

 

We got FSCS to pay us directly, rather than take it off the loan amount remaining.

This allowed us to get out of a hole we'd dug at the time in arrears and money we had borrowed to keep our heads above water.

 

After losing my job I was not receiving any benefits for over 18 months, apart from a small amount of Disability Living Allowance plus a small pension.

 

We were 'cannot pay' rather than 'do not want to pay' and the bad PPI really stuffed us at the time.

[dx100uk]

hope the ppi aligned with whatever calcs you did

 

watching always

 

dx

[caro]

Sorry to hear this hillard.

 

Does this mean you have to pay paragons costs?

 

Were you able to agree an amount that you could afford, and has that meant extending the loan?

 

I ask so that anyone in a similar situation can see what they're up against.

[hillards]

DX: The PPI amount paid was slightly above what I had calculated, but FSCS did take several months to sort it out so I put that down to the additional interest. I didn't go through all the calcs again, I just took the offer as it was there or thereabouts

 

Caro (and anyone following up): Yes, costs have been added to the account and we now owe them more than the darned loan amount when it was first taken out 8 years ago ! They got us to sign an agreement to satisfy the court which seems a bit strange, until you look at the reasons. The court needs to be assured that the respondent can meet the original terms of the agreement in making payments at a level to clear the balance within the remaining term. Otherwise they HAVE to issue a possession order as the respondent is unable to pay.

 

However, they have issued a 'side letter', clearly marked as being withdrawable at any time and not binding etc. As long as we continue to pay an agreed amount, which is the monthly instalment plus an amount off the arrears, they will not invoke the repossession order. They are able to withdraw this at any time and without reason, which is the dangerous part. Their solicitor assures me that they will not do so as long as we play ball. This agreement will remain in place beyond the original term end date.

 

It's not a matter of what we could afford, it's more like as much as we can scrape together. We did I&E with Shelter and had a significant shortfall. In effect, we are paying them every penny that I get in allowances from ESA and DLA. That's how it's worked out. My income is a heck of a lot less than it was when the loan was taken out but I'm having to pay more than I did then to stay in the house The wife works, minimum wage, short hours, and we will just have to get by. It could take a further 5 years to see daylight again, there was only 2 years left on the original term. My quick calculations tell me that it's going to cost us over £16,000 in added interest, fees and costs !

 

I'm not particularly happy at the outcome, but we could have lost the house and all the equity in it had we continued on the court route. It actually feels like a form of bullying where their side put up a barrister and solicitor and we couldn't afford to, so had to back down. So much for the legal system and justice ! I don't feel any sense of being a valued citizen of the earth who was given a fair chance in that respect. That is what anyone else would be up against, rather than the money !

 

When we first got into trouble, after I lost my job, we really were struggling. It took me 18 months to sort out getting DLA and ESA, as the disabled person I have become through illness. Long story, but I simply did not qualify for JSA or contribution based allowances through previous work in a voluntary capacity. Because the wife worked I was not able to get income-based JSA either. We eventually got a claim through for working tax credits after 9 months.

 

The PPI claim filled a gap in our payments to take the matter out of court the first time as we paid them a lump sum, borrowed from family and later repaid from the PPI. A year ago they reinstated the proceedings and, at that time, I was not getting the ESA and we simply could not pay. Paragon had, from time to time, agreed to accept lower payments than usual, but not on an ongoing basis.

 

Had we had decent and fair PPI in the first place then none of this would have happened. The broker told us that both of us would be covered for the full 10 year term. It turned out that only the wife was covered and only for the first 5 years. Even then, we've since found that there was a maximum of 12 months where the payments would have been made on our behalf, less a 30 day 'waiting period' ! The original amount of PPI, added to the loan and incurring interest as well, was £5,227.50 - at best, we would have claimed a maximum of about £4,550 under the PPI agreement IF my wife had been the one who lost her job, and within the first 5 years.

 

The court proceedings, being so spread out, did help in a way as it gave us time to get sorted out financially, as best we could anyway. Had I not lodged a defence a year ago then they would have had the house straight away, we clearly could not pay at that time. Through the following months I finally got my claim for allowance sorted out and we managed to do a little bit of catching up on things like council tax, paying off an overdraft and a few smaller bills before we eventually resumed payments to Paragon in October.

 

I've just had another run-in with them though. The agreement set out for the court was that the first payment would be made on the 31st October and monthly thereafter. I can't keep a balance on my bank account as I just don't have any spare money to do so, which means that I cannot may a payment to Paragon until the allowance and my small pension go in, which is always the last working day of the month. Using Internet banking and the 'faster payments' system I can normally pay them the same day. They were happy with that in October and November and I made the December payment on the 31st December. For whatever reason, it didn't go by 'faster payments' and was not recorded on their account until the 6th January. There was, of course, a bank holiday and a weekend in that time. They didn't allow for that and sent a snotty letter on the 2nd January.

 

I happily ignored that, knowing that I had paid. I made a mental note of the £10 charge for sending the letter, but was very unwell with a chest infection at the time and really could not do to be messing about telling them where they had gone wrong. Then we got another letter, dated the 16th, which was really threatening. Saying we had defaulted, they were applying for the possession order to be actioned... ! Obviously I contacted them straight away and lodged a complaint - they have now found that 'a manager' made a mistake and we should not have had that letter, with a further £10 charge for sending it of course. They have revoked the 2 letter fees and withdrawn the letter, with a small apology.

 

I've told them how ill this had made me, all the stress and anguish caused by their mistake. Don't know why I bothered, they don't care...

 

Let me know if there's any more I can fill in that may help others who get into a similar situation.