Thank you. ***** is a firm of solicitors.
In the absence of special provision in the contract, a right to contractual interest will end at judgment as a result of the "merger" principle. This means that, post-judgment, the creditor is no longer entitled to contractual interest, but will generally be entitled to statutory interest on the judgment debt.
You are correct that the statutory rate of interest is 8%.
If the terms and conditions that you agreed to with the solicitors that the contractual rate of default interest is 15%, the Claimant is going to have to prove that it wasn’t a penalty and that it was a genuine estimate of what they would suffer from late payment and not a penalty.
As it is at present, if you were to argue that, the court proceedings could easily last 12 months and of course you want to get the house sold.
So the easiest way of dealing with this is to pay the interest and then argue later, taking them to the County Court if necessary for what you paid over and above on the basis that you paid under duress/pressure/mistake.. I don’t think you would get the creditor’s interest set aside to the extent where you could proceed with the house and in any event it still going to take weeks if not months to do that and even then, I am not convinced it would be successful.
I am glad to help.
Hopefully, I have answered your query in a way that is simple and easy to understand.
I would be more than happy to clarify anything else for you. In the meantime, thank you once again for using our services.
I am happy to answer any specific points arising from this.
Please be aware that my answer is based strictly upon the information you have given me.
If you still need any points clarifying, I will be happy to reply because the thread does not close. In fact, it remains open indefinitely.
I am always happy to answer any further questions you have on any new thread in which case, please start your question with, “ For FES only”.
You don’t need to do it on this thread, just a new thread. You have me exclusively on this one.