Loan firm fights debt judgement

Tony and Michelle Meadows faced losing their home

A £384,000 loan debt cancelled by a judge was no different from other similar credit agreements, the Court of Appeal heard on Monday.

London North Securities is challenging a county court ruling that wiped out Tony and Michelle Meadows's debts.

The couple from Southport, Merseyside, took the loan out in 1989 with an annual percentage rate of 34.9% repayable over 15 years.

Liverpool County Court ruled the credit agreement was not enforceable.

'Unpaid payments'

Adrian Palmer QC, representing the loan company, told three appeal judges, the figures were not attractive at first sight.

"But in 1989 it was no different to any other non-status loan agreement."

He said if the couple had paid the instalments for the loan term of 15 years it would have cost them a total of £26,000, .

"What unfortunately went wrong was the fact that the payments went unpaid over periods of months and years at a time such that interest accumulated.

'Real complaint'

"There was compound interest on the debts and the figures mushroomed in that fashion.

"At the end of the day there was a very large indebtedness indeed."

He pointed out that £80,000 of the outstanding amounts related to legal fees accumulated over 12 years of proceedings.

Mr Palmer said the real complaint arose from the application of interest to arrears and charges when the couple fell behind with their payments.

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, had the debt and the threat to their home lifted following a ruling by Judge Howarth in October.