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Good morning In1994 myself and my wife signed a loan agreement with Lloyds. It stated that any future loans would automatically be secured on our home. In 2006 I increased the loans by a considerable amount and did not tell my wife. I understand that from 2006 the law changed and the bank had a legal obligation to advise my wife on each occasion that there was an increase in the liability on our home. The bank did this once out of 7 new loans. Is this legal and is SHE liable for the increase lending Richard XXXXXX
That is correct and no they have not.
They did send one only notification saying that it was now a legal requirement BUT from then on they did not advise my wife.
And was the notification before or after you completed?
On this one occasion it was before BUT on the following 6 new loans they did not inform my wife at all
Thanks. The new Act amends the existing Consumer Credit Act.
What this means is that under the old Act if there was a defective in the agreement or procedure then the whole agreement may be unenforceable - so the debtor would not pay
Under the new Act the Court can amend or rectify an agreement, procedure etc and then the agreement is valid
So as the agreement is governed by the new law, if it went to Court the Judge could overrule the defect.
Clearly if the loan is in your name, then you are liable to pay and not your wife.
Of course the loan would be secured on the security of the house in any event, but if there was an issue your wife could, potentially issue proceedings against you or possible the bank for negligence
Does this answer your question?
Welcome. Please remember to give my answer a great rating - thank you. If there is anything else I can help with or clarify please let me know
What would be required to issue proceedings against the bank as they clearly did not act within the new law
You would need to go to the County Court and complete form N1. There would be Court fees to pay.
You would really need a Solicitor to draft documents and represent you in Court. If you win then the Judge can award costs for you.
I am sorry what does overrule the defect mean?
But if you do lose, then not only would you have to pay your own legal fees, but those of the bank
If there was a requirement to notify you, the Court can say, well thats ok it does not matter
Unless I can help further I hope you have a good weekend
I am sorry but I dont understand.
I am sorry but I don't understand. Did the bank have a legal obligation to notify my wife on all occasions or not.
Ok. Under the old rules if a requirement or rule had not been followed then the agreement would be unenforceable
Under the 2006 changes, any rule or requirement not complied with, a Court can make the agreement enforceable, even if those requirement had not been met or complied with
I am sorry but I don't understand. Did the bank have a legal obligation or not to notify my wife or not.
Yes. But that does not necessarily mean the agreement is unenforceable
Does that clarify for you?
I am sorry but I don't understand. If it was the law did the bank have a legal requirement to notify my wife or not? If not what grounds would the bank have to justify their negelct in this matter. How could a judge ignore the law?
Justification is a different matter.I am saying that the bank can still enforce it with a Court order
The Judge has a discretion whether or not to allow the agreement to be enforced
I am not saying the bank will win - what I am saying is that the bank would require a Court order to enforce the agreement
Many thanks !!
I hope this clarifies it for you. I realise that this is frustrating but it would be for the bank to make the agreement enforceable not the other way round
Please remember go give my answer a great rating, it only takes a moment. Thansk
Sorry just a thought. As the bank set a precedent in advising my wife onone occasion on what grounds could they apply to a court to overide the law