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:

1. send a letter with the first £15 payment
   See How Much Do I Offer My Creditor
   See Letters to Send to Creditors

2. enclose a 'income & expenditure' statement
   See Completing an Income and Expenditure Statement

3. read about the creditor and get to know who you are dealing with
   See What to Expect from Creditors

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

4. 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
   0171 211 8000

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 12/11/99 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.

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.

Many thanks to Colin Duguid of Debt 24.com who is taking the time to provide this information as a service to homeworkers.