defaulted payments on car finance

tracey97

Hello

Hope this is in the correct category -
I have a friend who had a car on finance. Last year she lost her job and has been unable to keep up with the payments.
From what I can understand ..
the finance agreement was such that she could not sell the car , even if she advised the buyer and then paid off the balance once sold. She could only trade in for another car

Once she was halfway through paying for it, the finance company would then come and collect the car and she would have nothing more to pay. She was three payments off being halfway through but couldnt make these payments. As there will be charges incurred , this is now a significantly higher sum

Today she has to go to a court about this (is very worried - three weeks off giving birth and stressed).
I am going with her - not that I know what the procedures are or have any knowledge about these things, just for support really.

I have been reading about Step Change and I am going to mention it to her to see if they can help.
Should she mention this at court today?

MEM62

If your friend is at the stage of being summonsed to Court then she will have a long history of correspondence from the finance company. Unfortunately, I do think that anyone will be able to offer advice without some of this background - and in any case probably not before you will have to attend the Court.

foxy-stoat

I didnt think the finance company needed to go to court to repossess the car, unless they are trying to avoid doing that by getting her to court to clear the arrears.

How much is outstanding and what it is worth realistically?

Unfortunatley she does not have the luxuary of a car at the moment so her best bet is to clear the finance without it messing her credit history any further, if that is selling the car and clearing all outstanding finance or letting them take the car and reaching a repayment plan to clear the finance then do any of that.

She is not a criminal so no need to worry about going to court or cause any more stress to the baby.

Stepchange will not pay the arrears for her, she only needs to fill out a monthly expenditure sheet that shows her income and outgoings.

tracey97

thanks - i think then perhaps the best thing to do is ask them to take the car and see if they will accept a payment plan.

I know stepchange wont clear her arrears but she will need some time off current part time job after she has her baby so wont be able to pay anythimg at all. Shes worried about bailiffs so I was hoping that stepchange could advise us on how to arrange a payment plan which is affordable for her

I dont really have much more information to hand to post on here but Ill pop back this evening and Ill try and get more info from her

With regards to her credit history, I dont think that was in too wonderful shape before this situation .
Its just ironic rrally - she had to get this car as she had a new job which wasnt accessible on public transport. Then lost her job so has no need at all for the car. It s declared sorn and currently on my driveway

foxy-stoat

If the car's value is the same or more than the outstanding balance then it makes sense to get the best price for it, rather than letting them take it and possibly adding fees as well as them letting it get sold for a lot less at auction.

tracey97

the car wont fetch a good price - theres work to be done on it and neither of us know any one who is mechanically minded so it would have to go in a garage

Court appt went okay - their solicitor was there and explained that today was just to obtain possession of the car (although why they have felt it nexessary to go to court which had incurred costs I dont know. If they had contacted her she wouldve said to come and pick it up).

The judge has set a year for them to sell it during which time she wont incur any further costs. Once sold the finance company will let her know the balance she owes.

Thanks for your advice

jellie

tracey97 wrote: »

the car wont fetch a good price - theres work to be done on it and neither of us know any one who is mechanically minded so it would have to go in a garage

Court appt went okay - their solicitor was there and explained that today was just to obtain possession of the car (although why they have felt it nexessary to go to court which had incurred costs I dont know. If they had contacted her she wouldve said to come and pick it up).

The judge has set a year for them to sell it during which time she wont incur any further costs. Once sold the finance company will let her know the balance she owes.

Thanks for your advice

If your friend has paid more than a third of the finance, it can't be repossessed without a court order. If the car is on your driveway, they wouldn't have been able to find it anyway.

If your friend had kept in touch with the finance company and explained she wanted to give it back, they might have come to an arrangement about the outstanding amount due. They would have sent her a lot of letters before it got to court, but it doesn't sound as though she replied to them.

National_Debtline

Hi tracey


It sounds like it is in the lender's interests to fetch as much possible from the sale of this car - any "shortfall" left over will be a plain old unsecured debt and not one that will warrant top priority.


I would say there is very little point in your friend worrying about bailiffs getting involved over this, now or further down the line. The lender would have to go to court all over again to claim its shortfall and I'm not sure they would see the value in that, especially if she is bringing up a child without any working income.


Why not suggest to her that she contacts one of the debt charities for some free advice on her options? A general chat might help to put her mind at rest and let her focus more on the baby's forthcoming arrival.


Dennis
@natdebtline

tracey97

Thanks - she had paid just under half of the full amount so quite a bit remainining. Luckily the solicitor acting for the finance company was a nice lady and reassured my friend that this was simply to get the car signed back over to them.
Dennis - thanks for your reply. I am going to contact stepchange - I am not sure if she has any other debts but I;ll be seeing her for a chat over the weekend.
She had moved house and couldnt redirect her mail as she was moving then into temp accomodation. Her neighbour has been collecting her mail for her but could only get it periodically but there was just this one letter re the car.
Thanks to everyone who replied it is so kind of you to share your knowledge and ideas