Select Page

Part II contains definitions for many types of agreements covered by the Act. There are three main types of agreements; regulated consumer credit agreements, regulated consumer leases and partially regulated contracts. Debt adjustment occurs when a company or individual negotiates with the creditor or owner in an agreement on behalf of the debtor on changing the terms of debt relief, assumes the debt against payment by the debtor, or engages in “similar activity related to the liquidation of a debt.” Again, this is a vast area; The basic definition includes, for example, lawyers and accountants who act as negotiators for clients who owe money to a third party. There are some exceptions; A lawyer negotiating the settlement of his client`s debts is not considered a settlement of claims because section 146 of the Act excludes “a lawyer who conducts contentious cases” within the meaning of the Lawyers Act 1957. [62] Part V of the Act deals with four elements of entering into a credit or lease agreement; Disclosure prior to the contract, the formalities of entering into a regulated agreement, the termination of a regulated agreement and its consequences, and the withdrawal of a possible regulated agreement and its consequences. In some cases, specific information must be disclosed prior to the conclusion of a contract, as the standard provision states that contracts that are not complied with are unenforceable without a court order. [38] As a result of this report, the Moneylenders Act of 1900 was passed, which required the registration of lenders and allowed courts to dissolve “unfair” money lending agreements. However, there were two main weaknesses in the Act; First, many of the debtors who want to sue their lender to have the agreement cancelled were by definition poor and could not afford to be represented by a lawyer. Second, the law has focused only on certain types of lenders; Loans from a single lender were covered, which was not the case for loans from a bank.

In 1927, a second Money Lenders Act was passed, requiring both licensing and registration, prohibiting lenders from employing agents, advertising, or sending unwanted advertisements. [2] Unfortunately, the laws of 1900 and 1927 also covered commercial transactions, and since people lending money in a commercial area were not excluded like banks, a slight violation could make a loan completely unrecoverable. This was partially resolved with the passage of the Companies Act of 1967, which allowed the Board of Trade to license individual lenders who said they were acting like banks rather than money lenders. [3] In September 1973, the government published a white paper entitled Reform of the Consumer Credit Act, in which it stated that it intended to implement almost all of the Crowther Committee`s recommendations on consumer credit. The only real differences were an increase in financial protection limits from £2,000 to £5,000 (due to the depreciation of money) and enhanced protection for tenants under hire-purchase agreements. [9] For example, the definition of a small business changes when applied to the finance and insurance sectors. In these areas, a small business can represent a maximum of 1,500 employees and an average revenue of $35 million per year. On the other hand, a small utility company (for example, electric or gas utilities.B) can have between 250 and 1,000 employees with revenues of up to $27.5 million. A regulated consumer credit agreement is defined as an agreement between two parties, one of which (the debtor) is an individual and the other (the lender) is “another person” when the lender grants the debtor a loan not exceeding £5,000 (this figure was later increased to £25,000 and there is no upper limit under the Consumer Credit Act 2006). An exception to this definition is so-called “indemnification agreements,” which are agreements where the creditor is a soil improvement company, a charity, a friendly society, a syndicate, an insurance company, or “a corporation named or expressly named in a general public law.” [18] The definition of “agreement” is given as any discussion that leads to a legal relationship; a contract.

Therefore, the court`s decision as to whether an agreement constitutes an “agreement” under the law resides in English contract law and is not discussed in the law. In many cases, however, these are largely studies, because if a party does not attempt to challenge the existence of a contract, any agreement can continue regardless of its contractual validity. [19] Debt counselling is the advice given to debtors or tenants on the liquidation of debts under consumer credit or consumer lease agreements. This applies to any debt advisor, whether or not it is free legal advice; As a result, for example, the Citizens Advice Bureau is considered a debt advisor, even if its advisors are covered by a group license. .