Considering that money owed on credit cards is causing such financial worries for British borrowers, it's no suprise that many people are looking for any conceivable way to get free of these debts.

The most often encountered ways are the old standbys of debt consolidation loans and debt management programs, with possibly bankruptcy when there's no other option. More recently, however, a new method is becoming fashionable when it comes to clearing credit card debts: the illegal credit card agreement 'loophole'.

The basic idea is to exploit a loophole in the law that means that unless a credit card agreement complies with a set of strict criteria, then it is invalidated and therefore can't be enforced under law. The practical effect is that any money owed on accounts set up with one of these agreements cannot be pursued by collectors, and so doesn't have to be repaid. There are plenty of companies claiming that they can rapidly and easily arrange for your debts to be declared unenforcable in this way, but is this a realistic option?

The first point to note is that only credit agreements issued prior to April 2007 have any hope of being declared unenforceable under this loophole. If this condition is met, there are several reasons why the agreement may be invalid, including not being signed by both parties, the true costs of the finance not being distinctly stated, or copies of the original papers not being available on request.

Solicitors specialising in the financial field will examine your credit agreement copies on your instruction to see whether or not they are all legitimate. But here comes the gotcha: you usually need to pay a fee before an expert will even consider your case, whether or not you have any chance at all of having your debts declared unenforceable. If you have two, three or even more agreements to check, this can make it a pricey and possibly unproductive exercise.

You should also consider that some less dependable sellers of this service over-egg the likelihood of success, which many impartial commentators say are not as good as they are being portraid.

So what's the upshot? By all means ask your credit card providers for original copies of your agreements and examine them yourself, but before doing anything else get some advice off a debt advisor. If you think you might have a chance of success, then search out a company ready to work on a no win no fee basis, rather than parting with cash upfront in the possibly useless hope of leaving your debt problems behind.

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 5:48 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.