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Last Updated: Thursday, 28 October, 2004, 17:59 GMT 18:59 UK
'Extortionate' debt is wiped out
Tony and Michelle Meadows
Tony and Michelle Meadows faced losing their home
A judge has wiped out a couple's debt of 384,000 which had spiralled from 5,750 due to "extortionate" compounded interest rates.

Tony and Michelle Meadows, from Southport, Merseyside, took the loan out in 1989 with an annual percentage rate of 34.9% repayable over 15 years.

The pair were taken to court by the debt owners, London North Securities.

But the ruling - expected to have implications for consumers and lenders - could face an appeal.

I would advise people thinking of taking a loan to read the small print very carefully
Tony Meadows

Michelle Meadows said afterwards: "I can't get my head around it, I'm in a dream."

Tony Meadows added: "We have really kept this to ourselves for most of the time and it has been incredibly hard, but we brought the fight to them and we won.

"It wasn't a wanton spending spree we went on back then, it was just something we had to do at the time.

"I would advise people thinking of taking a loan to read the small print very carefully."

Judge Nigel Howarth said: "The claimant must be dismissed.

"The defendants are not indebted to the claimant pursuant to the agreement and the legal charges do stand redeemed."

High-risk rate

The loan company had wanted to take possession of the couple's house.

Mr Meadows, 45, works as a salesman for a windscreen firm, and his 44-year-old wife is a childminder.

The loan was taken out on a high-risk borrowers' rate, Liverpool County Court had heard.

Mr Meadows had told the court that he had borrowed the money to install central heating and convert a bathroom into a third bedroom.

The couple's solicitor Sarah Lapsley said the ruling is potentially important but could but subject to an appeal.




BBC NEWS: VIDEO AND AUDIO
How the couple ran up their debt



FROM OTHER NEWS SITES:
Sky News Couple's 'Extortionate' Debt Wiped Out - 31 hrs ago
Independent Judge wipes out loan row couple's GBP384,000 debt - 38 hrs ago
The Sun Judge clears GBP384k debt - 38 hrs ago
TelegraphJudge cancels 384,000 debt over 5,750 loan - 39 hrs ago
Guardian Unlimited Landmark ruling as judge erases couple's debt - 46 hrs ago
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SEE ALSO:
Q&A: 'Extortionate' debt ruling
29 Oct 04 |  Business
Debt woman 'no idea' of interest
27 Oct 04 |  Merseyside
Spiralling debt over 'home loan'
26 Oct 04 |  Merseyside
Debt is '67 times' original sum
25 Oct 04 |  Merseyside


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