Debt cancellation case 'no licence to borrow recklessly'

A county court decision to write off a woman's credit card debts due to the mis-selling of payment protection insurance PPI should not be seen as providing a licence to borrow irresponsibly, it has been claimed.

According to Chris Tapp, a director at Credit Action, consumers who take out loans should assume they will always be required to pay them back in full with interest added.

Commenting after Judge Jacqueline Smart cancelled Lynne Thorius's £8,000 debt and ordered credit provider MBNA to pay compensation at South Shields County Court, Mr Tapp said the verdict opened up the possibility that more people may be able to seek redress for PPI sales abuse.

However, he said it is important that people do not view such cases as encouragement to "wriggle out of debts they knowingly and willingly took on".

Mr Tapp added: "If people are able to pay back what they owe then they should do so, it's vital we retain this repayment ethic."

Those people who are struggling to make payments or manage their money should seek advice on debt, he added.

Last week, Tim Heming told the Sun that consolidation loans can be used to reduce debt levels.

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2009-10-06 12:10:17 © Moneyextra.com