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Alex J.
Alex J., Solicitor
Category: Law
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Experience:  Solicitors 2 years plus PQE
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A COMPANY IS TAKING ME TO COURT IN RESPECT OF A DEBT THEY SAY

Customer Question

A COMPANY IS TAKING ME TO COURT IN RESPECT OF A DEBT THEY SAY I OWE. I DISPUTE THAT I OWE THE DEBT TOTALLY AND HAVE FILED A DEFENCE IN THE COUNTY COURT. I AM WAITING A HEARING DATE. THE FINANCE COMPANY HAVE REGISTERED A DEFAULT AGAINST ME WITH THE CREDIT REFERENCE AGENCIES. CAN THEY DO THIS AND WHAT CAN I DO? SHOULD I FILE AN APPLICATION WITH THE COURT TO GET AN ORDER FORCING THEM TO REMOVE THE DEFAULT
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Can you tell me a bit about the circumstance under which they claim you incurred the debt?

Have the sent you a county court claim form? Does it say Judgment on it? What was the date of it and how much are they claiming?

Is the finance company registered with the FCA?

Kind regards

AJ
Customer: replied 2 years ago.

the debt was originally due to hsbc. i used to own a company and wanted some short term borrowing and thought about an overdraft. they suggested an overdraft and company credit card they gave me a pile of paper s to sign and pressured me into signing them they never explained what i was signing and when i said they wanted to take the papers away to get the forms explained to me they became funny.i naively signed all the papers some of which turned out to be a personal guarantee. i never knew i was signing a personal guarantee and if it was explained to me would never have done so. the company went into liquidation with about 8k on the overdraft and 5k on the credit card. hsbc came after me and i explained that i did not understand why as i had not guaranteed anything. the debt was eventually sold to a third party, debt collectors employed and eventually county court proceedings issued. in the papers from hsbc there was an aide memoire to the bank employee saying for example that if the person asked any questions they were not to proceed with the signing of the forms my contention is taht the bank clearly did not follow their own internal procedures and rules and therefore the "guarantee" is not binding on me as by their own rules i should not have signed the forms.


no judgement has been granted as the matter has not even had a hearing it is in the procedure of been transferred from northampton county court to my local county court. they are claiming just over 13k


the company is essentially a debt purchasing company hoping to make a quick buck

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Firstly you may have grounds to contend that the guarantee is unenforceable because you did not receive independent advice. There is case law on this primarily RBS v Etridge - if the bank used undue influence to force you into signing the guarantee it may be unenforceable. You need to check the following:
1. Was the guarantee executed as a deed or did it have valid consideration?
2. Was the guarantee a separate document? If it was just a clause included in the facility document it may be unenforceable as you would have signed it in your capacity as director and agent of the company and not in your personal capacity;
3. As evidence you will need the banks files on this to confirm you were told not to get independent advice - make a Subject Access request to the bank and start to write a witness statement recalling what happened (in detail when the papers were signed).

Secondly I would make a complaint to the financial ombudsman www.financial-ombudsman.org.uk/‎ . A bank has an obligation to treat you fairly and if they denied you the opportunity to take advice on a PG then the FoS will have the power to sanction the bank and compensate you.

Finally in relation to the debt company if they have issued proceeding you will have to put in a defence. The only way to do this is to establish that the guarantee is in fact unenforceable and this will require evidence from the banks files.
The only thing I can suggest in the interim to remove the credit default is to say to the debt collectors, that there is a serious question over the enforceability of their debt and if they do not remove the default notice you reserve the right to pursue them for any losses you suffer as a result, also say that it could be deemed unlawful harassment under s.40 of the Administration of Justice Act 1970 and you reserve the right to report them to Trading Standards.

I look forward to hearing from you.

Kind regards

AJ
Customer: replied 2 years ago.

what about getting the default removed from my credit file?

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Unfortunately there is not really much you can do about this until the hearing is settled. You can take the action I highlighted above and put pressure on them and put them on notice of the loss you might suffer and you can also right to the Credit Agency yourself and ask them to remove the default notice on the basis that there is an ongoing dispute with the creditor concerned.

Kind regards

AJ

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