Am i responsible for this loan

alfie09_2

I have taken out a loan from a bank through a driving school and was advised yesterday that they are going into administration but the loan of £3800 was paid by the bank directly to the driving school and we are now paying the monthly payments the first payment is due on Monday, what do i do, shall i cancel the direct debit but they informed us that they will charge a fee if this isn't paid, but on the other hand we will be paying for something that we cant continue with?????? please help

regards Julie

immoral_angeluk

You need to check the cancellation terms of your contract and see if it says anything about it. Also the loan agreement as it's going to depend on the type of loan. If it's a loan specifically for the driving school then it may be possible to have it cancelled if they can't provide the service, however if it's just a personal loan that the money was used to pay the school then it's likely you'll be stuck with it, if that makes sense.

nikki2804

I think you are still liable for the loan (at first glance) but check your T&C's and it will probably say that you have the right to sue the company and the finance company is jointly liable.

My OH was in the same boat when Advent training went into insolvency. Apparently you can't cancel the DD because you are then in breach of contract.