Considering that credit card debts are causing such great problems for UK consumers, it's hardly suprising that millions of people are looking for any and all ways to free themselves from these debts.

The most usual ways are the old standbys of consolidation and debt management programs, with possibly insolvency proceedings as a last resort. Lately, however, a new method is becoming fashionable when it comes to getting rid of credit card problems: the illegal agreement loophole.

This supposedly works by taking advantage of a legal loophole in the consumer credit act that means that unless a credit agreement respects a list of rigorous regulations, then it is invalidated and thus can't be enforced under law. The effective result is that any money owed on such agreements cannot be collected, and so does not need to be paid. There are many agencies claiming that they can quickly and easily arrange for your debts to be written off in this way, but is this practical?

The first point to note is that only credit card agreements arranged prior to April 2007 have any chance of being declared unenforceable under this loophole. If this condition is fulfilled, there are several reasons why the agreement may be invalidated, including not being signed by both parties, the true costs of the finance not being intelligibly expressed, or copies of the original papers not being available on asking for them.

Specialist solicitors will examine your documents on your behalf to see if they are all valid. But here comes the gotcha: you usually are required to pay a fee before an expert will even consider your case, whether or not you have any prospect at all of clearing your debts. If you have a lot of credit agreements, this can make it an expensive and possibly pointless exercise.

There's also the fact that some less professional providers of this service over-egg the chances of success, which many disinterested observers say are not as good as they are being portraid.

So what's the conclusion? By all means ask your credit card companies for original copies of your agreements and examine them yourself, but before going ahead with anything else talk to a free debt advisor. If you believe you might have a chance of success, then search out an agency ready to work on a no win no fee basis, rather than paying out upfront in the mere hope of escaping your debt problems.

Visit Debt Advice UK to find out more on how to legally clear credit cards.

This entry was posted on Tuesday, November 3rd, 2009 at 5:42 pm and is filed under Credit. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.