A Liverpool man has successfully managed to defend a claim by a lender, after a car he bought at Car Craft in Kirkby left him £12,000 in debt and facing the loss of his home.
Stephen Neary from Whiston had a County Court Judgment (CCJ) and a debt of £12,000 written off after his solicitor successfully defended legal proceedings brought by the lender, Creation Finance.
Mr Neary had taken out a loan in August 2006 with Creation Finance for the purchase of a new Vauxhall Zafira at the Kirkby branch of Car Craft. The salesman agreed to part exchange his old car as part of the deal, along with providing a loan for £15,100, arranged through Creation Finance, that same day.
Before signing for the loan, Mr Neary was informed by Car Craft that if the loan was paid off by the end of September 2006, he would not have to pay any interest on it. This was one of the main reasons that Mr Neary then agreed to take out the loan.
At the beginning of September 2006, he contacted Creation Finance to confirm the settlement figure to repay the loan. He was told that he would have to pay £15,265.75, by the end of September. He arranged alternative finance at a better interest rate to repay this sum and payment was made in full by the middle of September. Soon after he received confirmation from Creation that the account was closed.
Almost three years later, he received a letter from Creation Finance claiming that he owed over £11,000 under the credit agreement for interest repayments. There was a lengthy exchange of correspondence and phone calls between Mr Neary and Creation Finance, where Mr Neary tried to explain that he had paid off the account. Creation Finance never responded to Mr Neary’s assertions that the account had been paid off.
Mr Neary again heard nothing further from Creation Finance until he received documents from the Court in October 2010, informing him that Creation Finance had obtained a County Court Judgment (CCJ) against him on the 22nd August 2010, and were now applying for a charging order to secure the debt against his house. This was the first the Mr Neary had heard of any claim against him, and did not know that a CCJ had been obtained. He immediately contacted North West firm Stephensons Solicitors LLP, who are specialists in disputed debts and Consumer Credit agreements, to help him.
They made an application for Legal Aid on Mr Neary’s behalf and following this, they made an application to set aside the judgment. Creation Finance ultimately agreed to the judgment being set aside to allow Mr Neary to defend the claim. Creation argued that Mr Neary was never told that he would be able to avoid any interest being charged to the account if he was to repay the debt by the end of September 2006.
By defending the claim through his solicitors, Mr Neary was able to force Creation to settle the case out of court, resulting in the debt being written off and all of his legal costs being paid by the lender.
Delighted with this outcome, Mr Neary said: “I have always been adamant that I did not owe Creation Finance a penny as they had been repaid in 2006. I was shocked when I learned that they had obtained a CCJ of over £11,000 without my knowledge and that they were trying to secure this against my house. Without Stephensons’ help, I could have ended up losing my home because of this.”
Liam Waine, a partner at Stephensons, said: “This is a very unusual case, but goes to show the extent to which some lenders will go to recover money from people. Mr Neary was able to get Legal Aid to assist him in this case, but in the future, as a result of the Government’s proposed cuts to Legal Aid, people like Mr Neary may not have this assistance to help them with their cases.
“If anyone has a consumer credit debt, or a CCJ against them that they think they do not owe, they should contact our specialist team as a matter of urgency, especially while Legal Aid is still available, subject to eligibility. Our team can be contacted on 01616 966 229. If Legal Aid is not available, there may be other funding arrangements available.”
The consumer law team at Stephensons has been helping people across the UK get out of debt for more than 14 years. The firm is nationally-recognised in challenging unfair consumer credit agreements. For more information, log on to the firm’s dedicated money advice website www.debtandrepossession.co.uk.
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About Stephensons: Stephensons is the leading firm in the country at challenging unfair agreements, and specialises in writing off agreements, defending mortgage repossession claims and fighting bankruptcy and charging order hearings.