The usual methods are debt consolidation and debt management programs, with possibly insolvency proceedings or Private Voluntary Arrangements in extreme cases.

Recently however there is a new tactic when it comes to clearing credit card accounts: the illegal credit agreement.

This method uses a little-known “loophole” in the Consumer Credit Act that means that unless a credit card agreement complies with a group of exact regulations it is invalid and can’t be implemented legally.

The effective outcome is that any money owed on accounts set up with one of these agreements cannot be collected, and does not have to be repaid.

The first thing to consider is that only agreement documents drawn up prior to April 2007 have the possibility of being declared unenforceable under this loophole. If this is the case, there are several reasons why the agreement may be invalid, including not being signed by both parties, the APR not being distinctly stated, or copies of the original documents not being available on requesting them.

Lawyers specialising in the financial field will check over your credit agreements for you to determine if they are all sound.  If so, this loophole could be your ticket to financial freedom.

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