Q&As

Can a debtor be forced to pay for a bill which was bought by the debt agency from a credit card company, even though on the credit agreement it states that the debt cannot be sold to a third party?

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Produced in partnership with Russell Kelsall LLB (Hull); LPC (Shef) of TLT
Published on LexisPSL on 12/04/2021

The following Financial Services Q&A produced in partnership with Russell Kelsall LLB (Hull); LPC (Shef) of TLT provides comprehensive and up to date legal information covering:

  • Can a debtor be forced to pay for a bill which was bought by the debt agency from a credit card company, even though on the credit agreement it states that the debt cannot be sold to a third party?
  • The assignment of agreements to debt purchasers
  • If there is a non-assignment clause
  • If the non-assignment clause is valid and binding
  • Would a customer need to pay a debt to a debt purchaser where there is a non-assignment clause?

The assignment of agreements to debt purchasers

The practice of originators assigning agreements regulated by the Consumer Credit Act 2006 to a third party debt purchaser is long-standing. It is therefore very common for such agreements to include both a positive right allowing the originator to assign or transfer the agreement to someone else, and stopping the borrower (and not the originator) from assigning or transferring the agreement to someone else. For there to be a legal assignment, the requirements of section 136 of the Law of Property Act 1925 must be satisfied.

If t

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