R - Restricted-use credit
8/5/13
CONSOLIDATED FINANCE LIMITED v COLLINS [2013] EWCA Civ 475
The claimant and an associated company offered a scheme to the defendant bankrupt to provide funds to enable her to obtain the annulment of the bankruptcy order. The effect of the scheme was that the associated company initially provided the funds to the defendant and following the annulment the borrowing was refinanced by the claimant. The indebtedness was not provable in the bankruptcy because the loan post-dated the bankruptcy order. But the loan agreement with the claimant was a restricted-use credit agreement within s 11(1)(c) Consumer Credit Act 1974. It was not an exempt agreement and was unenforceable without a court order under s 127 because it had not been properly executed.