Legal Ways to Write-Off Credit Card Debt
Consumer Credit Act 1974, Individual Voluntary Arrangements
Feb 25, 2009
According to MoneyExpert.com, 4.5 million consumers are still trying to clear credit card debt from Christmas 2007. To make matters worse, uSwitch.com believe that 7.3 million consumers are now taking out credit card cash advances at an average APR of 29.97%. They also believe that 700,000 consumers are withdrawing cash on one credit card to make the minimum monthly payment on another.
As of December 2008, total credit card debt stood at £52.8 billion and this is set to climb. With increasing numbers of families struggling with financial difficulties and personal debt, it is important to identify ways to write-off credit card debt using various pieces of 100% legal government legislation.
Write-Off Credit Card Debt Under the The Consumer Credit Act 1974
It may be possible to write-off credit card debt if the credit agreement doesn't comply with the prescribed terms of the Consumer Credit Act 1974. In order to have a chance of success, the credit card agreement must have been signed before 1st April 2007. Although there are no precise statistics on how many credit card agreements aren't legally enforceable, it is believed to be in the region of 60%.
Examples of Potentially Unlawful Credit Card Agreements
- The lender doesn't have a copy of the credit card agreement;
- The amount of credit (or credit limit) hasn't been stated on the credit card agreement;
- The interest has been incorrectly calculated;
- An increased credit limit has been provided on the credit card agreement without it being requested;
- The credit charges are not deemed to be fair;
- No rate of APR is displayed on the credit card agreement;
- There is no mention of any 'cooling off' period;
- The credit card agreement hasn't been signed by both the lender and borrower.
Challenging the legality of a credit card agreement can be very complex and many financial institutions will simply ignore claims made by individuals. A solicitor will greatly increase a persons' chance of success with regard to a credit card debt write-off under the Consumer Credit Act 1974.
Write-Off Credit Card Debt with an Individual Voluntary Arrangement
Those with credit card debt, unsecured loans and personal overdrafts could use a debt solution, such as an Individual Voluntary Arrangement (IVA), to write-off debt. Some consumers have managed to eliminate up to 75% of unsecured debt with an IVA. Those wishing to proceed with an Individual Voluntary Arrangement need to have personal debt of upwards of £15,000 and be a home owner.
Consumers struggling with personal debt problems should investigate whether it is possible to write-off credit card debt under the Consumer Credit Act 1974 first. Don't despair if this isn't possible as consumers can still write-off up to 75% of credit card debt with a debt solution, such as an Individual Voluntary Arrangement.
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