Agreements with partial exemption
Certain agreements, while regulated by the CCA 1974, are exempt from some of its important provisions.
These include:
•small agreements are agreements where the total amount of credit involved does not exceed £50;
•hire purchase and conditional sale are excluded from the definition of small agreements.
This is just a selection of common types of debt, and there are many more which can be regulated or exempt. In some cases, a debt could be either depending on the date it was taken out and the amount borrowed. For example, before 2008, debts over £25,000 were not regulated.
When a regulated agreement complies with all the formal requirements, it is ‘properly executed’. This means it is legally binding and can be enforced by the creditor through the courts.
Agreements which do not comply with the formal requirements are ’improperly executed’. Whether or not they can be enforced through the courts depends on certain factors.
A court may allow an agreement to be enforced, depending on what is ’wrong with it’. For example if the only thing wrong with it is the misspelling of the clients name or a typing error, it is likely the courts would grant permission to the creditor to enforce this agreement.
Debt advisers who are unsure whether their client’s debt is regulated, or exempt are encouraged to seek specialist advice.