Loans Secured with Bills of Sale

mhenry9885

Thought I’d make a post detailing everything I have learnt about Bills of Sale used to secure loans. Hope somebody can make use of it.


A Bill of Sale is a piece of archaic legislation (1878) used to secure a loan on goods. In my case I purchased a car using a dealers in house finance and a Bill of Sale was used to secure the loan on the car.


Using a Bill of Sale makes it very easy for the provider to repossess the goods up on default as a court order is not needed and they do not need to use bailiffs.


For a Bill of Sale to be valid it has to meet very strict criteria.


1) The signing of the Bill of Sale has to be witnessed by one or more credible person(s) who are not a party to it.


An employee at a dealership who receives commission or payment for completion of the sale/loan for example is not a credible witness.


2) The Bill of Sale must be registered with the court within 7 clear (not working) days after signing the bill of sale. Registration after 7 days deems it void.


3) The wording is very important and must be the same as that of the 'Schedule' in the 1882 Amendment Act. See below



"This Indenture made the day of , between A.B. of of the one part, and C.D. of of the other part, witnesseth that in consideration of the sum of £ now paid to A.B. by C.D., the receipt of which the said A.B. hereby acknowledges [or whatever else the consideration may be], he the said A.B. doth hereby assign unto C.D., his executors, administrators, and assigns, all and singular the several chattels and things specifically described in the schedule hereto annexed by way of security for the payment of the sum of £ , and interest thereon at the rate of per cent. per annum [or whatever else may be the rate]. And the said A.B. doth further agree and declare that he will duly pay to the said C.D. the principal sum aforesaid, together with the interest then due, by equal payments of £ on the day of [or whatever else may be the stipulated times or time of payment]. And the said A.B. doth also agree with the said C.D. that he will [here insert terms as to insurance, payment of rent, or otherwise, which the parties may agree to for the maintenance or defeasance of the security]"




If any of the above conditions have not been met you have good grounds to apply to the court to have the Bill of Sale declared void. Then you need not worry about repossession should you ever have payment difficulties.


My understanding is that if a Bill of Sale is declared void it does not mean that the underlying Credit Agreement is, and my opinion is that you should continue paying regardless.


You can obtain a copy of your Bill of Sale by writing to:


Judgements & Orders Section
Room E15-17
Royal Courts of Justice
Strand
London
WC2A 2LL


and paying a fee of £5 if you know the registration number of the bill of sale (available from the lender)


or


paying a fee £40 if you do not know the number.




If anybody does have a loan secured with a Bill of Sale it certainly is worth investigating the validity of it.




Of course I am probably completely wrong about all of the above and it is purely based on research and of my own experiences. If anybody can add to it please do.

paddyrg

Interesting stuff. However as of course an invalid Bill would not remove the debt, the payments would still need to be met, or the creditor would go to court for a CCJ and then send round the bailiffs anyway, I'd have thought. I certainly would.

mhenry9885

Indeed, but a CCJ it doesn't necessarily mean that the goods will be repossessed. Bill of Sale does.

And yes, you should absolutely continue making payments.

novak1984

A company have taken my car, when asking the company who signed my bill of sale, it turns out it was an employee of the company.

Am i correct in thinking someone should witness me signing the bill and that they have nothing to do with the deal?

paddyrg

novak1984 wrote: »

A company have taken my car, when asking the company who signed my bill of sale, it turns out it was an employee of the company.

Am i correct in thinking someone should witness me signing the bill and that they have nothing to do with the deal?

Are you saying your signature was forged on the BoS? That would be a police matter, that is fraud, and illegal. Or are you asking if the BoS is technically unenforceable because of a technicality? Did you stop paying a loan on the property?

novak1984

no sorry i didn't explain correctly.

The witness that signed the BOS is the person that i met when they gave me the cash loan, nobody witnessed me signing the documents, i thought this was a requirement?? It was just me and an employee of the company at the time of signing the documents.

The loan was a cash loan secured against my car with a Bill of Sale and credit agreement.