Law Re Assignment of Debts

[caspar]

Morning All,

Firstly, mods / Niddy - if any of you think this is in the wrong section, please feel free to move it. Wasn't sure whether to post it here or under legal.

A quick question to which I've been trying to find an answer for a couple of days.

It is generally accepted that a debt cannot be sold while in dispute. Now, say that dispute was down to the OC not responding to an SAR in time, can anyone point me to the piece of legislation where this is stated?

I know it is against good practice and is mentioned in guidelines, but where is the legislation to back this up, or is it sufficient to argue that it is just against good practice?

I am of the opinion that a disputed debt cannot be sold while in dispute, but I can find no legislation whatsoever to back up my belief.

[pompeyfaith]

Re: Law Re Assignment of Debts

Casper,

Good practice, being fair and the TCF which is aimed at businesses financial or otherwise are all points that will go far in court as the harrison case proved as that is I believe a core principal under common law in any case.

Furthermore as you know most CCA cases will state CCA 1974 on the N1 as the law the claim is being brought under, however it does not take long before common law is mentioned.

Regards

[SaltnVinegar]

Re: Law Re Assignment of Debts

Morning All,

Firstly, mods / Niddy - if any of you think this is in the wrong section, please feel free to move it. Wasn't sure whether to post it here or under legal.

A quick question to which I've been trying to find an answer for a couple of days.

It is generally accepted that a debt cannot be sold while in dispute. Now, say that dispute was down to the OC not responding to an SAR in time, can anyone point me to the piece of legislation where this is stated?

I know it is against good practice and is mentioned in guidelines, but where is the legislation to back this up, or is it sufficient to argue that it is just against good practice?

I am of the opinion that a disputed debt cannot be sold while in dispute, but I can find no legislation whatsoever to back up my belief.

Hi Casp

My understanding was this was more of a 'guideline' than actual legislation.

However, personally I would use this as leverage against a creditor or DCA as another example of establishing unreasonable behaviour should a debt ever get to court.

The more examples you can give that you have tried to resolve things in a reasonable manner, whereas your creditors have behaved in an unreasonable manner, I think, the better.

This is one of those things.

Cheers
SnV

[Paul.]

Re: Law Re Assignment of Debts

i have pondered this many times, there is nothing in the texts i have read that bars the sale of an account whilst there is a dispute being raised.

Also the failure to comply with s78 on its own does not give rise to a dispute to the debt,

[caspar]

Re: Law Re Assignment of Debts

Paul,

Thank you for your reply. Can I ask you something while you're around this thread. I've read in an Absolute Assignment they can assign the rights and duties, but not the contractual part.

Is this correct? If so, that presumably means you could quite easily be paying DCA B who have an Absolute Assignment, while arguing a contractual dispute with OC A.

Have I got that right?

The assignment bit is a very useful clarification as it means that many of us, myself included, have been advising incorrectly.

Thanks again,

Caspar

[charitynjw]

Re: Law Re Assignment of Debts

i have pondered this many times, there is nothing in the texts i have read that bars the sale of an account whilst there is a dispute being raised.

Also the failure to comply with s78 on its own does not give rise to a dispute to the debt,

Any help?
http://www.hartpub.co.uk/companion/propertylaw/spl.html
(Good reviews)

[The Debt Star]

Re: Law Re Assignment of Debts

i have pondered this many times, there is nothing in the texts i have read that bars the sale of an account whilst there is a dispute being raised.

Also the failure to comply with s78 on its own does not give rise to a dispute to the debt,

Presumably the new owners cannot farm it out to DCAs to collect on their behalf viz a viz AJA s40 and OFT Guidelines 2.8k

[Paul.]

Re: Law Re Assignment of Debts

well they could as long as they hold good title to the debt then the can ask a third party agent to recover the debt on their behalf

[The Debt Star]

Re: Law Re Assignment of Debts

Even if the debt was in dispute with the OC? Thought the OFT Guidance said DCAs can't collect on prior disputes?

[Paul.]

Re: Law Re Assignment of Debts

it depends on the "dispute" really

There needs to be a move away from the ideal that the failure to comply with a s78 request gives you a valid dispute because the OFT makes clear it dont as does McGuffick

however, if you have a missold PPI dispute for example then the debt shouldnt really be sold til the matter is resolved.

[Never-In-Doubt]

Re: Law Re Assignment of Debts

Morning All,

Firstly, mods / Niddy - if any of you think this is in the wrong section, please feel free to move it. Wasn't sure whether to post it here or under legal.

Hiya

I've moved it to consumer rights which seems to be a well suited category for now

[The Debt Star]

Re: Law Re Assignment of Debts

however, if you have a missold PPI dispute for example then the debt shouldnt really be sold til the matter is resolved.

Aha! Just what I was hoping to hear. Do you know of any precedent for this?

[caspar]

Re: Law Re Assignment of Debts

This is why I asked about Absolute Assignments including rights and duties, but whether or not what I read about the contractual side not being able to be sold was correct. If the dispute was ppi if what I read is right, you could still have the debt sold on as you're not disputing that, but the mis-selling of the ppi left with the OC.

Presumably when you say a mis-sold ppi debt shouldn't be sold you mean it is not good practice, rather than it can't be sold?

You will have gathered this is not hypothetical! This is the exact wording:

· The burden of a contract cannot be assigned. It is therefore necessary to novate, rather than assign, certain contracts. Novation is, in effect, the rescission of one contract and the substitution of a new contract in which the same acts are to be performed but by different parties

[The Debt Star]

Re: Law Re Assignment of Debts

if you have a missold PPI dispute for example then the debt shouldnt really be sold til the matter is resolved.

"Should not" -vs- "not good practice." That's the rub of this imo and why I ask if there's a precedent in law, regulation or case law about the assignment of debt in dispute on a non-CCA related matter.

On my Arrow asignment thread I have posted a further response form the FOS in which they address this. Seems firmly in the "not good practice but bugger all we can do to help you" category.

Also, what difference it makes, for example in court, if "not good practice" happens.