Can I refuse to return leased equipment?

getmeouttahere

Not really sure where this thread belongs so apologies if I've put this in the wrong place.

My ltd company took out some office equipment on lease 2 years ago and I signed as personal guarantee. Last year my ltd company ceased trading and is in the process of being struck off companies house, however, as personal guarantee, I continued to make the monthly payments for the leased equipment.

However, my personal finances are in a mess, and I am starting to deal with my debts through StepChange. I have contacted the lease company and asked for help but they are saying they won't entertain any form of repayment plan without the return of the equipment on lease.

The thing is, I have been paying for this lease for 2 years and only have a year left, at which point I can pay a £1 admin fee to keep the equipment, so it doesn't make sense to hand the equipment back and be left with nothing to shop for the 2 years of payments.

The lease company are getting to the stage where I feel like they are bullying me in an attempt to get blood out of a stone. They previously asked for my current employers details, my 3 months bank statements and full income/expenditure. I sent them the income/expenditure that StepChange prepared, along with the list of all my debts, however, explained my reasons for not sending my bank statements and employer details (I don't want to risk being harrassed at work). They have taken this as a sign of me not co-operating and have refused to help me now and are demanding the leased equipment back.

What can the lease company do if I refuse to return the equipment?

Seanymph

I suspect bad things.

You have to either pay for the additional year, or give it back. That's why it's a lease.

Sorry.

ConsumerWizkid

You gave a personal guarantee so they can sue you and bankrupt you personally.

westy22

The thing is, I have been paying for this lease for 2 years and only have a year left, at which point I can pay a £1 admin fee to keep the equipment, so it doesn't make sense to hand the equipment back and be left with nothing to shop for the 2 years of payments.

Usually, paying a peppercorn rental to retain use of the equipment at the end of a lease does not confer ownership of the asset to you. You will always have to give it back at some stage and can never own it if it is on a finance lease. Having nothing to show for it at the end of a lease period is what a lease is all about.

National_Debtline

Hi there

If you can't afford the contractual lease payments at present, after taking into account your essential living costs, then I think you simply need to pay this lease company what you can manage at present, with or without their approval.

Are you storing the equipment securely at home? If so, the lease company is likely to need to seek a court order to be allowed to repossess the items. That makes life a bit harder for them, but it would also likely result in extra court costs being added to whatever you owe them.

The lease company cannot oblige you to provide bank statements or details of your employer. However, they are very unlikely to let you make reduced payments without wanting to recoup their items - there would be nothing in that arrangement to their benefit.

Dennis
@natdebtline

getmeouttahere

ConsumerWizkid wrote: »

You gave a personal guarantee so they can sue you and bankrupt you personally.

Yes I'm aware that they can persue me, however, no-one can 'bankrupt you'. That's a decision you make.

westy22 wrote: »

Usually, paying a peppercorn rental to retain use of the equipment at the end of a lease does not confer ownership of the asset to you. You will always have to give it back at some stage and can never own it if it is on a finance lease. Having nothing to show for it at the end of a lease period is what a lease is all about.

The lease states that the £1 fee at the end is to transfer ownership to myself.

National_Debtline wrote: »

Hi there

If you can't afford the contractual lease payments at present, after taking into account your essential living costs, then I think you simply need to pay this lease company what you can manage at present, with or without their approval.

Are you storing the equipment securely at home? If so, the lease company is likely to need to seek a court order to be allowed to repossess the items. That makes life a bit harder for them, but it would also likely result in extra court costs being added to whatever you owe them.

The lease company cannot oblige you to provide bank statements or details of your employer. However, they are very unlikely to let you make reduced payments without wanting to recoup their items - there would be nothing in that arrangement to their benefit.

Dennis
@natdebtline

Thanks Dennis. I have confirmed to the lease company that the items are in my possession. Are the lease company likely to seek to repossess even if I pay what I can afford?

I have asked for a temporary arrangement for a 6 month period so we can assess the situation then but as soon as I refused to send bank statements and employee details they refused to even discuss the matter with me.

Could they get the police involved if I refuse to allow them to collect the equipment?

Tixy

getmeouttahere wrote: »

Yes I'm aware that they can persue me, however, no-one can 'bankrupt you'. That's a decision you make.

If you break the T&Cs of an agreement with a creditor then they could petition for your bankruptcy.
A decision to grant a bankruptcy order rests with the courts, not with a creditor and not with a debtor (even if a debtor petitions for their own bankruptcy the decision is still the courts).

getmeouttahere wrote: »

Could they get the police involved if I refuse to allow them to collect the equipment?

It will depend on the agreement and likely (depending on that agreement) how much capital you have repaid. If you are 2 years in to a 3 year agreement then as Dennis says it is likely they would need to a court order to repossess the goods.

getmeouttahere

Tixy wrote: »

If you break the T&Cs of an agreement with a creditor then they could petition for your bankruptcy.
A decision to grant a bankruptcy order rests with the courts, not with a creditor and not with a debtor (even if a debtor petitions for their own bankruptcy the decision is still the courts).

Thanks, however, StepChange have advised that this wouldn't be possible. Are they wrong?

Tixy wrote: »

It will depend on the agreement and likely (depending on that agreement) how much capital you have repaid. If you are 2 years in to a 3 year agreement then as Dennis says it is likely they would need to a court order to repossess the goods.

Thanks. Is there a general rule of thumb as to how much you have to have paid in order for then to need a court order? There are 2 agreements and having just checked the 2 agreements, with the charges they've added, I've paid 54% of the first agreement and 49.85% of the second agreement.

The other thing I was thinking is that they would need to repossess from my home rather than the companies registered office.

Tixy

With a personal HP agreement after you have paid 1/3 and if you do not consent to the repossession the creditor has to get a court order.

With a business agreement I imagine it will be different (and quite possibly less favourable to the customer) but I would have expected it to be in the agreement/documentation.

DevCoder

Regarding bankruptcy, any creditor who you owe more than £750 to can petition for your bankruptcy so it would seem StepChange are wrong in this case.

Id advise you to read
https://www.gov.uk/apply-to-bankrupt-someone/overview

cte1111

Hire purchase is not the same as a lease though. When you lease something, it remains the property of the leasor. The fact that there is an option to pay a payment after x years to buy it, does not make any difference.

So if you keep the item and don't keep up the payments, then you will effectively be stealing it from the legal owner.