Paying repossessed car debt

Holly59

Looking for advice for my son whose car was repossessed after he fell into arrears with car finance. They have now instructed a solicitor and are chasing him for £20,000 which he hasn’t got. He needs to sort out some sort of repayment plan by the end of this week and is worried sick. He says he has been told by Citizens Advice that the loan wouldn’t qualify for being written off. Is this correct? He acknowledges that he owes the money but really doesn’t know what to do. Any advice please? 

ManyWays

It would be better if you could persuade him to post here about it.
Do you know how long ago the finance started, was it difficult for him from the start? 
what is the rest of his financial situation like, does he have other debts, did he lose his job? 

sourcrates

Bit more information required.

No one expects him to pay 20k just like that, is he working? has he any assets?

No need to be worried, there is always a solution, but we need to know a lot more info on his circumstances first.

Holly59

Hi ManyWays. He only had the car for a few months from Nov 23 until around May/June when he stopped the monthly payments (he didn't tell us he was having money difficulties). He had money in the bank and a good job at the time, but he changed jobs and his savings ran out which led to slipping behind with his payments.

I've found out he had other debts but I think I've managed to clear most of those for him since August last year when the car was repossessed and the whole situation gradually unfolded with some very gentle persuasion.

He's been procrastinating to say the least, and is a bit of a "bury your head in the sand" kind of person so it's been really difficult to understand exactly where he stands at the moment, but I have seen the solicitors letter which arrived in January and he is now running out of time, with the threat of CCJ/debt collection agency, etc. He told me that Citizens Advice said the debt wouldn't 

He wouldn't post on here, and he doesn't know that I've posted asking for advice.

Is this something that can be resolved online by contacting a debt advice service (such as National Debtline) or would it be better to arrange a face-to-face with someone? This is uncharted territory for all of us so some advice from somewhere would be greatly appreciated.

Holly59

sourcrates said:

Bit more information required.

No one expects him to pay 20k just like that, is he working? has he any assets?

No need to be worried, there is always a solution, but we need to know a lot more info on his circumstances first.

He has worked in a couple of jobs with basic + commission since the end of last year, starting his most recent job in January this year and he's happy and settled there. He's only 22 and living at home with us so he doesn't have any assets - he did have money in the bank, but that has all gone and he always seems to be broke at the end of the month, and he now drives a company car so no assets there either. 

Getting him to talk about it is a battle. I gave him a list of places to get advice and he says that he has spoken to Citizens Advice who have told him that it's unlikely the debt can be written off (or words to that effect), but surely with a debt of that amount there should be some way of reducing it somewhat to make it more manageable?  

sourcrates

He will only be expected to pay what is affordable, even if that is £1 a week.

Its much better to nip these things in the bud, than have to deal with legal action, a simple letter stating what he can afford, if anything, will remove the threat of going to court, tell them he has no assets, and a limited income, most repossession debts tend to be high and never get repaid.

At the moment he is being treated as a "won`t pay" he needs to be seen as a "can`t pay" to avoid it going further, a good creative letter and they may just give up on this altogether.

Holly59

sourcrates said:

He will only be expected to pay what is affordable, even if that is £1 a week.

Its much better to nip these things in the bud, than have to deal with legal action, a simple letter stating what he can afford, if anything, will remove the threat of going to court, tell them he has no assets, and a limited income, most repossession debts tend to be high and never get repaid.

At the moment he is being treated as a "won`t pay" he needs to be seen as a "can`t pay" to avoid it going further, a good creative letter and they may just give up on this altogether.

Thank you so much for that advice. Are there any useful letter templates out there for this type of situation? 

Brie

My suggestion would be for him to put his big boy's pants on and start sorting this out.  It's great that you are supporting him but it's got to be him that gets things actioned.  

So step one is he should talk to a debt agency - StepChange, NationalDebtline, Community Money Advice (CMA) or Christians Against Poverty (CAP) are the best known debt charities.  They will provide free and non judgmental advice.  And they'll help him put together a debt solution.  A Debt Management Plan (DMP, aka the possible £1 a month mentioned by others) is just one option and may be the best one for him. 

But whatever they help him with the first thing is that the car finance company would be told that they are assisting him and that any action should be delayed while a financial statement is put together.  The financial statement will show the finance company what he can realistically afford if anything.  The vast majority of creditors will be satisfied to get a small amount every month rather than nothing.  And taking him to court, with the cost of solicitors etc, is never a good option for anyone really.

"He says he has been told by Citizens Advice that the loan wouldn’t qualify for being written off."  Well no it wouldn't be written off at this point but should he be in a really bad place financially there are options which can effectively do essentially the same for him.  

sourcrates

The National Debtline.org website has a raft of template letters for all things debt related, I`m sure he can cobble together something to deal with this.

Correct me if I`m wrong, but if the car was repossessed then it has surely already been to court this matter hasn`t it?

So he must have a judgement already? or did he hand the car back voluntarily?

Holly59

sourcrates said:

The National Debtline.org website has a raft of template letters for all things debt related, I`m sure he can cobble together something to deal with this.

Correct me if I`m wrong, but if the car was repossessed then it has surely already been to court this matter hasn`t it?

So he must have a judgement already? or did he hand the car back voluntarily?

Yes, he handed the car back voluntarily. 

katsu

I know you are worried for him, but he needs to learn to deal with these things. He has your home and is warm and safe and isn't going to end up in prison or anything, so it's OK for you to let him work this out with your support, instead of you working it out.

You said you've cleared a lot of other debt for him, and that's so very kind and caring, but we see here that many people who have someone else clear up their debts and then they get into more debt problems later.

If he is living at home, has no car, has a job but is still broke every month, then leaning to budget and make a plan to repay the debt will really help him so the advice above about who he can speak to seems the way to go. 

Even if he does get a CCJ it will have a repayment plan set based on monthly repayments as he doesn't have 20k to pay it now (assuming he engages with the court process).

Good luck to you and him.