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Thread: Debt Purchase

  1. #1
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    Debt Purchase

    Ok. Let's discuss this process here instead.

    This is a post on the other thread by me. Is this about right regarding the terms of the contract?

    The liabiltity of the debt remains with the orginal borrower, that is true, but what if cancelling the contract then releases the borrower from all other terms of the contract? (i.e the inability to transfer/sell the debt?) If all other terms are cancelled along with the agreement, save for the debt itself, then I can see a way to sell the debt. The problem I see is getting the lenders to recognise this and not pursue the borrower for the debt and the risk of court proceedings.

  2. #2
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    Re: Debt Purchase

    Quote Originally Posted by GB24 View Post
    Ok. Let's discuss this process here instead.

    This is a post on the other thread by me. Is this about right regarding the terms of the contract?

    The liabiltity of the debt remains with the orginal borrower, that is true, but what if cancelling the contract then releases the borrower from all other terms of the contract? (i.e the inability to transfer/sell the debt?) If all other terms are cancelled along with the agreement, save for the debt itself, then I can see a way to sell the debt. The problem I see is getting the lenders to recognise this and not pursue the borrower for the debt and the risk of court proceedings.

    Contract law is central to the way in which we all interact with each other. People enter in to contracts every day with each other.
    If you enter in to a contract with someone then whilst the contract is live its incumbent upon you to adhere and abide by the terms of the contract.
    Let me give you an example. You and I sign a contract for you to wash my windows every Saturday. You sign it, I sign it and it’s witnessed by a third party.

    There we are; we now have a legally binding contract.

    If you or I don’t abide by the terms of the contract we can take each other into court and place the document in front of the judge and seek redress.
    People have the power to create law by entering into contracts with each other.


    Anyway back to the contract. If you stopped turning up on a Saturday and failed to wash my windows I could take you to court to seek redress.

    However If you had terminated the contract would I have any right to insist that you continue to turn up on Saturday and wash my windows?


    Absolutely not.


    Termination of the contract is absolutely what it means. The contract has ended.
    You are no longer under any obligation to perform under the terms of the contract nor are any of the clauses under the contract applicable to you anymore.

    The lenders are fully aware as to what you’ve done and they tend to play the game of deception. Lenders will do all they can to deceive you in an attempt to get you to pay up.



    I have many many letters in my possession from lenders putting forward their legal arguments all of which do not stand up.



    The reason why CCK sellers are being given such huge offers of 70% off the balance is solely because the lenders know that they do not have a leg to stand on.


    In regards to the liability of the debt remaining with the original borrower I don’t entirely agree with you.

  3. #3
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    Re: Debt Purchase

    This the post I wrote in the other thread and would love to see documentary evidence of what you claim for CCK


    Hunter this is what I wrote in post #38,maybe you missed it but how about answering the questions.
    I do not understand the legal arguments about what BR claims to do but I guess that what counts is results so lets turn the thing round rather than DJ having to reveal the details of the alleged CCK clients who have had ccj registered against them why don't you post some evidence of people actually benefitting from the CCK service and having got rid of the debt.I went to see Basil in July and he claimed at that time he had over a thousand clients so I would expect he has many more now.
    Also what exactly does BR do once he 'buys' the debt assuming that having bought the debt the lender goes after him?

    This debate is like going to a car showrom to buy a car and getting into a debate with the salesman about the theory of the internal combustion engine and whether it will work or not-it just won't happen coz the salesman can show you proof that it does-he shows you the freakin car working.
    That can not be so difficult can it?and if he can't show you the car working how many is he going to sell even if he is the best debater in the world.
    If CCK works I'm in simple as that and rarin to go :crazy1:

  4. #4
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    Re: Debt Purchase

    a debt is not a something, it is a lack of something. yes, you can sell your eggs. if you have a contract to sell eggs to a certain store at a certain price, that contract could be sold. somebody else could deliver eggs to the store and the store could have no complaint, as long as the quality and price is the same.

    now suppose the shopkeeper says, i am having financial trouble, can't pay for your eggs. of course, you stop delivering eggs. if he owes you money for eggs already delivered, you sue to get that money plus the lawyer's fee.

    he calls you and says, ha ha, i sold that debt i owe you to my cousin in Brasil. you have to go to Brasil to collect it. of course, its nonsense. the court still awards you a lein against his store and the goods inside until you are paid.

    the sherriff will go with you to take his stuff. really.

    his deal with his cousin in Brasil does not concern you or this debt.

  5. #5
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    Re: Debt Purchase

    Hunter,
    This is from the other thread

    From what you have posted its clear that the lenders do not accept that the debt has been passed on and are still harrassing the original debtor albeit with offers of a reduced balance to settle the matter.
    What I don't understand is exactly what CCK have done for their money?
    They have claimed to have bought the debt but the lender is still after the original borrower and from where I'm standing could issue proceedings against him at any time.
    The fact that the matter has been going on since May is irrelevant-if such proceedings are issued will CCK defend the client in court?
    And if so what happens if they lose?

  6. #6
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    Re: Debt Purchase

    Irrespective of the legalities of the issue CCK would still need a Consumer Credit Licence !

    Let's have more discussion on how CCK can trade legally without a licence from the OFT .

    And if CCK can do exactly what they claim they can do then why not take a credit card from me with a balance of £1400 no late payment fees and no PPI and demonstrate to us all with no money changing hands how their product works !

    Once they can do that then they are gonna have far more believers !

  7. #7
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    Re: Debt Purchase

    an example of transfer of liability, would be insurance. if the insurance company agrees for a fee to pay for any damage i cause with my car, that's fine. but suppose the insurance company says, sorry, we won't pay this one on whatever technicality? the victim is still owed the money, and i am still responsible to satisfy that debt. i will get sued, not the insurance company. my wages will get garnished, not the income of the insurance company.

    in the case of transfer of debt, if some company wanted to pay off all my cards then let me pay them back, the credit card company has no complaint. they lost nothing. if the outside company pays off only half, then i still owe the other half.

  8. #8
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    Re: Debt Purchase

    http://en.wikipedia.org/wiki/Novation

    Novation is a term used in contract law and business law to describe the act of either replacing an obligation to perform with a new obligation, or replacing a party to an agreement with a new party. In contrast to an assignment, which is valid so long as the obligee (person receiving the benefit of the bargain) is given notice, a novation is valid only with the consent of all parties to the original agreement: the obligee must consent to the replacement of the original obligor with the new obligor.[1] A contract transferred by the novation process transfers all duties and obligations from the original obligor to the new obligor.

  9. #9
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    Re: Debt Purchase

    http://en.wikipedia.org/wiki/Assignment_(law)

    However an Assignment only transfers the rights/benefits to a new owner. The obligations remain with the previous owner. Compare Novation.

  10. #10
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    Re: Debt Purchase

    Quote Originally Posted by David Jack View Post
    So how do you explain the contract that states ' you may terminate this agreementv at any time by settling the amount outstanding' as written into virtually all credit card contracts?

    HP and conditional contracts go further in settlement by specifiying amounts due depending on how long the contract has left to run?

    On the issue of 'if you own it you can sell it', how do you account for mortgage contracts then? You own the house and you sell it, but you are still under an obligation to pay the lender the sums due.

    In Debt Management i have regularly argued with DCA's that the client doesnt have a contract with them and therefore will not respond to requests for payment nor recognise the DCA's rights over the debt, this works on many occassions, so what stops a lender from saying to someone who has 'brought' the debt from doing exactly the same?
    In any contract both parties have an equal right to terminate the contract. Equality of contract is one of the fundamental principles of contract law.


    There is no doubt that lenders have certainly encroached upon the rights of debtors. This point is not just relevant to consumer credit agreements it’s relevant to everywhere that you look within society today.



    If you are of the opinion that all the clauses written within credit agreements by the banking industry are fair and just and do not encroach upon your rights then you’re mistaken.



    David you agree and openly admit that the banks have ripped us off as you mentioned that within one of your emails that you sent to me. That being the case would you not then agree that there might just be a possibility that the banks have not been quite so fair and just in regards to consumer rights when constructing these agreements.



    Furthermore in regards to termination rights section 98 of the CCA provides a debtor with the right to terminate.
    However Termination rights of a debtor are ultimately inconsequential as the lender is forbidden to seek redress in the courts in regards to the total balance and legal costs unless they terminate the contract. That’s a legal Fact.


    Prior to any court action the lender must terminate the contract and any contract a debtor has with CCK will become instantly legally binding.

    In regards to your question about the house your logic is misguided. If you outright own the house and you sell it you don’t have to pay anybody anything.
    David you only own a house if you’ve paid for it. When you purchase a property using a mortgage the lender owns the house not you.

    The money was lent against the property. This is a secured debt.

    I n relation to your final question are you stating that a DCA once they’ve purchased the debt have no right to collect/sue the debtor as there is no contract in place?

    I’m sure there a plenty of cases where a DCA has successfully issued a claim against a debtor in the courts.

  11. #11
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    Re: Debt Purchase

    Quote Originally Posted by Bertie Magoo View Post
    This the post I wrote in the other thread and would love to see documentary evidence of what you claim for CCK


    Hunter this is what I wrote in post #38,maybe you missed it but how about answering the questions.
    I do not understand the legal arguments about what BR claims to do but I guess that what counts is results so lets turn the thing round rather than DJ having to reveal the details of the alleged CCK clients who have had ccj registered against them why don't you post some evidence of people actually benefitting from the CCK service and having got rid of the debt.I went to see Basil in July and he claimed at that time he had over a thousand clients so I would expect he has many more now.
    Also what exactly does BR do once he 'buys' the debt assuming that having bought the debt the lender goes after him?

    This debate is like going to a car showrom to buy a car and getting into a debate with the salesman about the theory of the internal combustion engine and whether it will work or not-it just won't happen coz the salesman can show you proof that it does-he shows you the freakin car working.
    That can not be so difficult can it?and if he can't show you the car working how many is he going to sell even if he is the best debater in the world.
    If CCK works I'm in simple as that and rarin to go :crazy1:

    I can assure you that DJ has no clients that have had CCJ’s issued against them. Not one CCK client has had a CCJ issued against them. If there was one I’d have told you. I’ve no reason to hide this from you or from anyone else.
    I’m a man of genuine integrity and I’m not that desperate for cash to lure vulnerable members of the public in to parting with hundreds of pounds for nothing.


    In regards to DJ I’ve asked the gentleman to provide evidence of one of the so called 28 that he has in his possession. No surprise that he’s not been forthcoming. He’s cited the fact that he’s not able to get to his office until the 5th of Jan. Now isn’t that convenient.


    In regards to people benefitting from the CCK service I have lots of evidence.

    None of the clients that I have dealt with have paid the lender a penny from the day they sold their debts to CCK.
    None of my clients and that includes myself had a CCJ issued against us.


    I have evidence of the banks offering clients an enormous discount to settle the balance.
    If you have a read of some of the posts within the “side show” that seems to be taking place between David Jack and FightingForConsumers you’ll see a reference to David Jack pointing out that a 30% discount offered by a bank for settlement of an account is normal.


    One of my clients had a debt of £19,037.66 on a credit Card with MBNA. The debt was sold to CCK in May of this Year.

    On the 4th of December the gentleman received a letter from MBNA offering settlement of the account for a payment of £5711.30.


    That is a discount of 70% of the existing balance.

    Now the question arises is that had this client not have sold his debt to CCK would he have been able to contact MBNA and negotiate a discount of £13326.36.


    Would David Jack not agree that a 70% discount is highly unusual considering he stated in an earlier post that a 30% discount was fairly standard ?


    I have the letters in my possession and I’m happy to provide you with them if you wish to see the evidence.

    Last edited by hunter_01; 12-24-2009 at 03:33 AM.

  12. #12
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    Re: Debt Purchase

    Quote Originally Posted by Bertie Magoo View Post
    Hunter,
    This is from the other thread

    From what you have posted its clear that the lenders do not accept that the debt has been passed on and are still harrassing the original debtor albeit with offers of a reduced balance to settle the matter.
    What I don't understand is exactly what CCK have done for their money?
    They have claimed to have bought the debt but the lender is still after the original borrower and from where I'm standing could issue proceedings against him at any time.
    The fact that the matter has been going on since May is irrelevant-if such proceedings are issued will CCK defend the client in court?
    And if so what happens if they lose?

    Any debtor that sells their debt to CCK is provided with a contact Journal to record any contact that the lender makes with them post sale of the debt to CCK.
    All clients are made aware that they should expect contact/resistance from the lender. Not all lenders are the same. Some do contact the clients and some don’t.



    Nobody in their right mind should expect the lender to openly accept that they have sold their debt whether they believe it to be legal or not.

    The lenders must show resistance to it otherwise waving the white flag would be catastrophic for them.
    Lenders always defend their position and if they do settle its usually moments before the court hearing.



    Have you come across anybody that’s written to bank and pointed out that the APR is missing on their agreement and the bank have written back writing the debt off with immediate effect?
    Lenders will always defend any claim that’s issued against them.
    If a lender issues a court summons CCK will attend court and provide evidence that the debt is owned by them and not by the defendant. Furthermore the debtor will be fully indemnified in the event of a court judgment costs order.

    Last edited by hunter_01; 12-24-2009 at 03:08 AM.

  13. #13
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    Re: Debt Purchase

    Quote Originally Posted by mumbles View Post

    Novation is a mechanism whereby one party can transfer all its obligations under a contract and all its benefits arising from that contract to a third party.
    Novation does require the agreement of all 3 parties.
    The crucial point here that you've overlooked is TERMINATION OF CONTRACT.

    All sellers terminate their contracts prior to selling their debts. Novation is only applicable to live contracts. As the definition of novation clearly states......."transfer all its obligations under a contract "

    Novation is not taking place here as novation would require the consent of the lender. Termination of the contract relieves the debtor of any obligation to perform under the terms of the contract. Under contract law termination is absolute.
    Post termination of the contract the debtor is left with a post contractual liability to repay the debt & the debtor is free to contract with whomever he so desires and to sell the debt on.

    So novation is not taking place. The contract is terminated prior to the sale of the debt. Without terminating the contract the debtor could not sell/assign the debt as a clause within the contract prevents him or her from doing so.

  14. #14
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    Re: Debt Purchase

    Quote Originally Posted by mumbles View Post
    Quote
    "However an Assignment only transfers the rights/benefits to a new owner. The obligations remain with the previous owner."


    That correct. Under English law you can only assign the benefits to a new owner. The obligations/liabilities remain with the previous owner

    HOWEVER

    there is an exception to the rule.

    In the explanation below the burden of a contract is the liability to repay the debt.

    Assignments of Contractual Rights
    The burden of a contract cannot in principle be transferred so as to discharge the original contracting party without the consent of the other party. There are two exceptions. If the contractual rights have been assigned, those rights will be subject to the original contract. An instance of this, Britain & Overseas Trading Ltd v Brooks Wharf Ltd, an exemption clause in the original contract was binding on the assignee of the contract. Such cases are examples of the "conditional benefit" principle.


    This principle applies where the right which has been assigned is on the condition that certain restrictions are observed.
    These are an intrinsic part of the right, so that the burden is annexed to the benefit of the contract. Therefore, the person with the benefit must perform the burden, or otherwise forego the benefit.

    i.e the liability of the debt is annexed to the benefit of the debt.


    Treitel on Contracts outlines this.


    Treitel sets out exceptions to this general rule (see Treitel page 702). An example is where the obligation to perform a contract in place of the assignor is annexed to the assignment of the benefit of the contract. Where this is the case, the assignee must perform the burden of the contract or forego the benefit if he fails to do so.

    Treitel describes this as the "conditional benefit principle", which arises where the right assigned is conditional or qualified, the condition being that certain restrictions should be observed or certain burdens assumed (see Tito v Waddell (No.2) 290 et seq)


    So the benefits of debt are intrinsically linked to the burden(liability) of the debt.

    Basil has bought the benefits and he can't profit from the benefits of the debt without also taking on the burden.(liability)


    You can't assign the burden of a contract but Debt falls under the conditional benefit principle so the burden is part of the benefit.


    Thats why banks have no liability once they sell the debt on. If banks could only sell the benefits of a contract then they would be open to court action from debtors for incorrectly drawn up agreements even after the sale of the debt.


    When Debt purchasing companies/debt collectors buy debt from banks they take on the benefit of the contract and along with that the burden.


    If this is not the case then the question in regards to the complete and total diminished liability of a lender post sale of a debt still remains a mystery.

  15. #15
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    Re: Debt Purchase

    Yawn,the salesman still hasn't started the engine and is rabbiting on about the theory of the internal combustion engine so I am leaving the showroom to buy a horse.
    stop telling us about all the documentary evidence you have and just show it to us

  16. #16
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    Re: Debt Purchase

    Quote Originally Posted by Bertie Magoo View Post
    Yawn,the salesman still hasn't started the engine and is rabbiting on about the theory of the internal combustion engine so I am leaving the showroom to buy a horse.
    stop telling us about all the documentary evidence you have and just show it to us
    Give me your email address and I'll send you the evidence you want

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