Problems with Debts? One Affordable Monthly Payment More Information

I Cannot Afford Hire Purchase Payments

QUESTION

I have a computer which is on H.P. I cannot afford the weekly repayments of £20, due to a change in circumstances. I have not yet paid a third of the amount owed. I offered the company a reduced payment of £15 per week, but they have reused the offer and state that they will repossess the item. I cannot find any rules/regulations governing the repossession of H.P items and what happens once they've gone (i.e can I still end up owing them money??)

Reply

Although there are hard and fast rules for all consumer situations i.e. pay one-third and the HP company can only repossess with a court order, in most cases common sense prevails.

I would:

a) send a letter with the first £15 payment

Consumer Debt Help 1 8.7 How Much Do I Offer My Creditor

Consumer Debt Help 3 8.20 Letters to Send to Creditors


b) enclose a 'income & expenditure' statement
Consumer Debt Help 1 8.6 Completing an Income and Expenditure Statement


c) read about the creditor and get to know who you are dealing with
Consumer Debt Help 1 8.8 What to Expect from Creditors

if no further forward after a,b, and c:

d) threaten to report them to the Office of Fair Trading due to their unreasonable refusal of our offer:

Office of Fair Trading
Consumer Credit Licensing Bureau
Craven House, 40 Uxbridge Road
Ealing, London W5 2BS
 020 7211 8608

If they do try to repossess:

The HP company has to formally default (see below) you and then formally terminate the HP agreement. The amount due on termination will take into account the early termination of the agreement and will therefore have a fair reduction in the original total interest figure.

If they repossessed and sold the goods you are liable for the balance after the sale of goods amount has been applied to the termination balance: the amount the goods will be sold for is historically poor, with very little you can do about it.

A Formal Default

A Default, must show date and amount of default, is a formal demand for payment of some form of Agreement, say, a Hire Purchase Agreement that you have missed three payments of. A Default must contain a number of regulatory requirements. That it is served under the Consumer Credit Act, the demand must say who you are, delivered to where you live (or work), who the creditor is, their address, how to contact them, what is owed, what it is owed for, when you must pay the amount by and what will happen if you do not pay i.e. "if you do not pay £100 by 12/11/03 we will take legal action", and finally that you should seek advice… A CCJ and a Default are both regarded as serious information by lenders etc. You cannot pay or satisfy a Default: it is just there! (Very, very unfair). An inexperienced clerk at a finance company can send a Default to you without any supervision or serious default.

From what I know from your notes, the creditor is being very unreasonable and is not in keeping with accepted debtor standards.

A further note about Defaults

If you are in a position to settle a Default Notice, on receipt of the Default contact the creditor and talk to a supervisor. Tell them that their Default Notice is unfair, extremely damaging and may well jepordise your current financial standing to the extent that you can foresee one  creditor in particular who will get 'extremely nervous' if you are seen to be unable to maintain payments to another creditor: this is not a big lie, nor a little one, its the truth! Ask them to cancel he Default Notice (and yes they can, quite easily) and that you will make the required payment: I suggest you find what they need if at all possible.

Can Debt Collectors Collect Old Debts?

QUESTION

I was looking through your articles on credit file & repair (extremely helpful) and the one item that I am not completely clear on is default notices on a credit file are they handled in the same way as ccj's (i.e., removed from a persons record after 6 yrs), which brings me to my real question I have a default notice on my record that is about 61/2 yrs old (and probably like a lot of people had forgotten about it) but just recently I was contacted by a finance company stating that they had bought the debt from the original creditors, and therefore were now recovering the debt.

They stated that if I agreed to pay that the debt that I would be issued with a certificate of satisfaction and that they could mark my credit record as having satisfied this debt, is this true?

Finally if I settle this debt and they do mark my file as settled

1) will this then remain on my record for a further 6 yrs? and

2) if this is the case would I not be better off (in terms of my credit record) not settling the debt?

Many thanks for the advise, the web site that you provide has been very informative and helpful, many of the sites out there are very confusing but yours has already helped a lot.

Reply

Yes, defaults are automatically removed on the sixth anniversary. After this period the debt is dead - plain and simple.

A formal default can only be issued where a live agreement exists. i.e.

If you had a hire purchase agreement dated 12 Aug 1993, and you missed the next three payments Sept, Oct and Nov, the creditor would issue a formal default for the three months.

If you did not settle the default, the HP company would probably terminate the HP agreement once terminated no more defaults can be issued, as you cannot be in default of something that is terminated.

If the creditor failed to take action in the six years since the default: tough!

If you have your sums wrong, the creditor, or the new owner of the debt, can take action to recover the debt if under six years since their last formal action.

I would still look to settle for 10% of the debt and let them come back to you with a yes or no, and how much they will settle for: dont be too keen to settle!

A satisfaction notice will only exist for as long as the default has to go to reach its sixth anniversary.