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Is it possible to wipe out credit card debt legally

Having credit card debt problems is not just a financial matter, but one that impacts upon all aspects of life, including relationships, mental health and family. Because shame often surrounds credit card debt, the victim may opt to keep it secret, hoping it will go away. Facing up to the debt problem may seem impossible at first, but this is the only way of combating debt and regaining life’s enjoyment. Only then can credit card debts be written off legally.

Is it possible to wipe out credit card debt legally

What to do About Credit Card Debts

Credit cards are a secure and convenient way of shopping and will provide protection for the purchase of items of over £100 under Section 75 of the Consumer Credit act. However, what may begin as a small personal loan could spiral into huge arrears due to late payment charges, borrowing fees and bank admin costs. It is easy to ignore credit card statements with the promise to clear the balance or budget a later date. But all the time, the bank is adding more to the loan. Radical steps must be taken to stop the credit from growing out of control. In some cases, it is possible to have the debts written off.

Steps to Wipe Credit Card Debt

Establishing the size of the debt is an uncomfortable task, but must be done. This means adding all credit card statements calculating overdrafts, hire purchases and personal loans.

The next step is seeking the support of a good free debt counselling service. The following bodies are dedicated to helping those who find themselves in debt.

National Debtline (NDL)
Consumer Credit Counselling Service (CCCS)
Financial Ombudsman Service (FOS)
Office of Fair Trading (OFT)
Citizen’s Advice Bureau
DirectGov has an online benefits adviser that can calculate the entitlement of certain benefits and tax credits and the amount
Money Saving Expert, an excellent online financial resource

Payplan, a free debt management company will draft a debt management plan (DMP) to be agreed between and debtor and the creditor on a fair and affordable way to pay the debt. Once the DMP is in force, bank charges and interest are frozen. Any unreasonable behaviour on the lender’s part, such as demanding huge instalments upfront or harassment, will not look good if the matter goes to court.

credit card debt

With all the facts, the debtor may discuss his or her options with the credit counsellor. Important information regarding the debtor’s rights, for example, will help make him or her feel more empowered.

Could Credit Card Debts be Written Off?

If it comes to light that the credit card company has missold a loan agreement, the debt could be deemed null and void. This means the debt could be written off if the credit company has, for example, sold payment protection insurance along with the loan without the borrower’s knowledge. Reading the small print on the agreement will reveal if this is the case.

The loan agreement may not be enforceable if there are any admin errors, such as not quoting the correct APR or if a copy of the original contract has gone missing. However, some amendments have been made to the Credit Consumer Act (CCA) since April 2007, which rule more in the lender’s favour. A more serious error, such as a name mix up or a faulty utility meter could result in the debtor paying the wrong debt.

The credit company must be transparent regarding their calculation of the debt itself. Ambiguity, evasion or unfairness on anything will be pointed out to the judge if it goes to court, which will go against the lender’s favour.

credit card

The National DebtLine, PayPlan and the Citizen’s Advice Bureau provide stock letters, requesting that the part or all of the debt be written off by the lender. If the lender refuses, the borrower may invite the lender to take him or her to court. The court costs may prove more costly than the debt itself, which could work in the debtor’s favour, particularly if the lender or has violated any of the guidelines set out by the Office of Fair Trading.

Protection for the Debtor

The distressed will find any communications from creditors difficult to face and may be plagued by telephone calls and letters. It is important that the debtor is aware of their rights in regards to the creditor’s attempts to recover the debt via harassment or any behaviour that may cause distress

MIND recommends that the Office of Fair Trading (OFT) should be made aware of any poor practices of lenders in chasing up debt. If this has been shown to be the case, the credit collection agency could have their licence taken away and this will not look good if the dispute goes to court. Solent Mind provides a service that assists those who are in debt and are suffering mental distress or who have mental health problems.

Best Free Credit Card Relief

Debt worries can be a lonely problem, but there are many great debt counselling services available to help those in need. By knowing debtor’s rights, there may be a way of finding a more affordable way of paying off the debt and even having the credit card debt written off. However, the debtor must follow guidelines and the advice given by the debt counseller rather than try to cope alone.