Car repossession

Taking out a hire purchase agreement means that the goods you have in your possession are, in principle, hired until the payment for the goods have been settled at which time you will be classed as the owner of the goods.

If you fail to keep up repayments on a hire purchase agreement, it is possible that you will face repossession of those goods.

A lender can take legal action against you for the arrears you owe but they cannot enter your premises to repossess these goods without your consent, they must first apply to the court for a repossession order.

Before a creditor can take any further action, you must be served with a default notice. Once the default notice has been served, the lender can then apply to the court for a repossession order. If you have paid less than one third of the value you borrowed the lender can repossess your goods without a court order.

They cannot however enter your premises to repossess these goods without your consent. If you don’t give your consent and a default notice has been served, the lender will then apply to the court for a repossession order. If you wish to continue with payments but need some extra time, once you have received the default notice you can apply for a Time order form, N440, to give you time to get funds together to continue payments.

If you have paid one third or more of the monies borrowed your goods will then be classed as “protected”. This means that goods cannot be repossessed without an order from the court. If you wish to keep the goods you can contact the lender and ask them if they are willing to negotiate reduced repayments.

If you are unable to maintain payments to a Hire Purchase agreement, PayPlan may be able to help you reduce the payments to your unsecured debts allowing you to meet your contractual payments to your Hire Purchase agreement.

For immediate and free debt advice please call PayPlan free on 0800 316 1833 or use our Debt Help Form to submit your debt problem online.

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