Need advice re: Car payments & settlement

kilgore1080

Hi all,

I need some advice about the following situation; any and all help is greatly appreciated! As I have only just found out about this I don't have all the details, I've included what I know but if you need specifics please say so and I'll try to find out.

My mum & dad have a car on what I assume is HP, this was all well and good until my dad had a heart attack and since then has not been able to work (my mum has been his carer). The company they make the payments to for their car had accepted them making reduced payments for a period of time but now they are threatening court action to recover the car, they have offered an early settlement amount of £3300 (my dad haggled them down from £4500) by mid-june or they will proceed with the legal action. My mum & dad don't have this amount of money and have asked if I can help them out and they'll pay me back an amount every month. Now I can afford it but it comes pretty close to wiping all my savings out and given the current economic climate I'd prefer to see if there's an alternative to losing my safety net.
I asked if the company would re-instate the monthly payments but apparently due to my dad's ongoing condition they won't do that. As my parents don't have any savings and are only in receipt of benefits the CAB have advised them that the court is likely to award the car back to the company. CAB are also saying that my mum & dad aren't getting all they should be and are looking into it but it doesn't help the immediate problem of the car company wanting this lump sum. Any thoughts anyone?
Thanks in advance!

Tixy

If you also want to look at their benefits etc you can try www.entitledto.com

with regards to the car I would agree that usually a court would let the car company repossess. It might be worth trying to dig out the original finance agreement.

How long have they had the car? what was the original debt? If they have paid over 50% of the debt off they are often able to hand back the car with no penalty.

They could then look to purchase a much cheaper car (if they still need one at all).

kilgore1080

Yeah they can hand back with no penalty I think, its just that they got a good deal on it originally and now definitely do need a car so they'd rather not lose it having already paid most of it off.

Tixy

How much more than £3300 would this car be worth on the open market?

I can see they may want to keep it but wonder if they can afford to run a car that costs that much.

mrsJef

Hi there,

Not sure if this is any help but i work for a used car sales company and have had several dealings in the past with car finance companies. When customers of ours have found themselves in trouble we have been known to approach the finance company and make a 3rd party offer to settle the finance for them. You could try doing this. If your parents give the finance company approval for you to talk to them, then you explain that they are not going to be able to make payments but you wold be willing to make a full and final payment on their behalf. Ensure they know the offer is on the table for a limited time and put in a lower offer than you think they'll take & then haggle. I have known Lombard take £7000 on a £14000 debt.

Hope this helps & remember if they say no then you're no worse off!
X

standupguy

You really do need to check the type of agreement.

From what you say the agreement could be well be a loan rather than HP as they are talking about legal action rather than repossession and they are willing to give a large discount on what is owed.

That being the case they cannot repossess the car to help offset their losses and are reliant, if it comes to it, on getting a ccj for the money.

A judge could well award a ccj with an amount to be paid monthly that is within your parents current means.

If it is a loan agreeement get your parents to stand firm and offer only what they can afford to pay - even if it got to court, which may be unlikely, a judge would be sympathetic to their circumstances.

kilgore1080

standupguy wrote: »

You really do need to check the type of agreement.

From what you say the agreement could be well be a loan rather than HP as they are talking about legal action rather than repossession and they are willing to give a large discount on what is owed.

That being the case they cannot repossess the car to help offset their losses and are reliant, if it comes to it, on getting a ccj for the money.

A judge could well award a ccj with an amount to be paid monthly that is within your parents current means.

If it is a loan agreeement get your parents to stand firm and offer only what they can afford to pay - even if it got to court, which may be unlikely, a judge would be sympathetic to their circumstances.

Thanks for the advice, I'll get my mum to have a look. She just wants it sorted out and having re-looked at my finances its more affordable than I initially thought so things are looking up! I told her that whatever happens I'll make sure they have the car.

Big thanks to all for their advice so far, I'll post an update with what the outcome is. In the meantime I've got her to get Blackhorse (the finance provider) to put the offer in writing along with a statement that the payment will result in the account being fully settled and the car being fulled owned by my parents with nothing left outstanding.