I have a debt problem but I want to avoid an IVA or DMP

gonzo127

personally i would try and keep up payments if you can since if you defaulted 4 years ago this will drop off in 2 years however get a mark now and it iwll be on for the next 6. i am just thinking that from your SOA you can keep up the payments yes it will require work but it is possible

this being said does the finance company have any early repayment penalties?

just to throw this into the mix could you sell the car privately for the 4+k you originally say it was worth and pay the whole amount left on the finance in a lump sum? basically ask them for a full and final settlement figure if paid as a lump sum and see if you can raise that amount of money? and get rid of the car and the finance in one go?

chris_gray1980

Hi Gonzo,

Thank you for your reply,

unfortunately there is an added complication my wife wants of the car finance which is something i cannot do unless i pay the settlement in full which if im honest i cannot do, so i could be forced to get rid of the car, i just do not know how that will pan out

i thought that you were unable to sell a car privately if on finance because technically you do not own that car, its the property of the finance company. my mum has offered to lend me some money so i am wondering whether to use this money to go towards the car finance pay off.. im going to ask her if she can lend me the full settlement of £5585 then i sell the car for £4000 but that is a bit risky if the car does not sell so i am not sure there

i was looking at webuyanycar, they buy the car and settle the remainder if i pay the remainder by credit or debit card or by my mum, this would avoid the repossession mark BUT i have read bad things on here about them and they have only offered £3125 for the car on the internet so no doubt that will drop again..

my friend and my mum are saying just let the car go, its going to take you several years to clear your debts and then you need to save for a deposit for a house so it will probably 6 years plus before you will be in a position to get a mortgage any way, in a way they are right there and my debts are my main focus now and yes it will take me around 5 years to be debt free so another year then the mark has gone and no way i could save a deposit in 1 year for a house... i know 5 years time is a long way away and i do not know what is going to happen within that time.

Thanks again Gonzo, i do appreciate your help

jonjamie1970

Hi Chris

I have been through similar to yourself with divorce etc and its a tough time, control of your finances gives you something as you will no dount be experiencing a lack of control on personal matters.

What was the original sum borrowed including interest and over what period ( for the car)

chris_gray1980

Hi JonJamie

Yes its a nightmare time indeed, yes i am trying to focus on my finances which indeed gives me something because i have very little control on anything else at the moment, the figures are below

The original sum was - £6500
Term - 60 month
Interest - 31.1% (yes i know i was a fool to go for this at the time )
Total to be repayed - £12740.40

Currently

Total Paid to date - £4482.71 (inc £700 deposit)
Halfway point - £6370.20
Difference to reach half way point - £1887.49 (collection fee £360)
Total payable - £2247.49

Hope that helps

Jesthar

I am no expert of car finance, but that APR is higher than any of your other debts, so I'd thing that if you can get rid of it, do so! Then that's £200 a month to go towards other debts.

Incidentally, if you paid off the car loan in full and therefore owned the car, why would you then sell it if you need a car? Not saying you shouldn't, just curious as to why?

~Jes

jonjamie1970

chris_gray1980 wrote: »

Hi JonJamie

Yes its a nightmare time indeed, yes i am trying to focus on my finances which indeed gives me something because i have very little control on anything else at the moment, the figures are below

The original sum was - £6500
Term - 60 month
Interest - 31.1% (yes i know i was a fool to go for this at the time )
Total to be repayed - £12740.40

Currently

Total Paid to date - £4482.71 (inc £700 deposit)
Halfway point - £6370.20
Difference to reach half way point - £1887.49 (collection fee £360)
Total payable - £2247.49

Hope that helps

So if I have done my sums correctly you are only 9 months away from handing the car back ? (+ collection)

This is a horrendous loan but your not far away from being in the clear.

When my wife left me I had a four bedroom house, I rented out 2 rooms at £250 each and this was a massive help. The people were nice and it was nice to have people around the house. From experience the wrost times were when I shut the door at night and turned out the lights. Just having someone around really really helps as longs as you choose wisely. I always shared with girls BTW :A

Be strong and try and focus on being happy for your kids, be inventive in what you do with them. A simple, free walk to the park they may well remember forever but a miserable dad will also stay with them (again I know from experience)

BTW I also have a default from 2006 when my wife bought £700 of items from next whilst furnishing her new house (whilst still plannign to leave) and then hid the following post and summons. It has stopped me getting more in a credit mess as I cant get credit easily but it also means I cant get the best deals.

chris_gray1980

Hi Jes

The only reason i would sell the car is to 1) pay my mum back and 2) buy a cheaper car to run, its too expensive to run in every case, i am thinking about just giving it back and being done with it, it certainly is a HORENDOUS loan you are not kidding but it was a case of oh i can have this car at this price per month rather than look at the interest on that and how much i have to pay back i was blinded you live and learn

Hi JonJamie

I am sorry to hear you have also gone through the dreaded divorce all you have said above is very correct and accurate, i have been down the road of thinking the kids have a new life and a new person as a father figure who is better than me because he is with their mother and well has lots of nice things and i just dont.. Iwas down so much and i struggled being happy but it has got a bit easier (with the help of a therapist) i have seen that they love me for who i am not what i have and that they love spending the little time we have together with me.. We do have good times on bike rides etc, try and do as much free things as possible and throw in the odd ice cream

i calculated about the same that in 9 / 10 months i could hand the car back with no deficit BUT it will still be a repossession on my credit rating and that will then be 6 years on top of the 9/10 month before it comes off my record so im thinking it is probably best to let go now, use the saving to chip away at my other bits to try and reduce my debt and years to pay back.

Thanks again for your encouragement and support, it does mean a lot in these dark times

Jesthar

Mmm, k. Would there be any difference if you paid to the halfway point? Clueless about these HP things!

~Jes

jonjamie1970

Chris

Dig out your policy, if its HP and regulated then you can hand the car back at the halfway point as part of the halfs and thirds law governing finance companies.

I had a BMW 330 CI over 4 years and gave it back after 2, BMW collected it and inspected, signed off, debt over.

This rule does not effect your credit rating, so If you can get to this point then its better for you in the long run.

Meanwhile you can sort your other expenditure and get a lodger in.

Ending your hire purchase agreement using the half rule

You have the right to end a hire purchase agreement by using the half rule. This means that if you have paid more than half the 'hire purchase' price, you can return the car and give notice, in writing, that you are ending the agreement. Your agreement with the finance company must show half the hire purchase price, so check to see how much you would need to pay in order to return your car under the half rule.

chris_gray1980

If i return the car now i have to pay up to the half way point which is the £2247 paid back at £93 for 24 months

That is very interesting reading JonJamie, i didn't realise that, it may be worth holding off in that case and look at cutting down in other areas! for 10 months, unfortunately i will admit if it breaks and when it comes to the MOT and TAX i will be screwballed, i couldn't afford it ohhhh do i cut my losses and just be done with it it would be another 4 years of a black mark since i have one which will be on there for a further 2.. i was thinking about negotiating with my credit card for a lower settlement but i believe that goes down as a black mark as well these creditors don't make it easy for you