Unable to pay back Debt

Andyjflet

Babayaga96, you cant borrow your way out of debt. The only way out of the hole is to get a bigger shovel, so get rid of as much of it as you can first and the start earning as much as you can to build an emergency fund and taking NO MORE DEBT!
I learned my lesson at 51 years old, dont be me. 

fatbelly

Their factsheet has a sample calculation

https://nationaldebtline.org/get-information/guides/hire-purchase-debt-ew/

kimwp

babayaga96 said:

@fatbelly @ManyWays I have read these people now. Please correct me if I am wrong -

I currently owe them £9700 with one missed payment.

I send them an email saying I would like to exercise voluntary termination as per that act.

They will take hold of the car and I will still owe them 50% of £9700? 

The question is, what would you have paid them overall if you kept the car for the full term of the contract. Then I think, your liability is limited to 50% of that. 

Personally, if you are going to have to pay that anyway, then I think I would keep the car until 50% is paid off, then do voluntary termination? Otherwise you are paying for a car you don't have and then presumably also paying for another car that you need? @fatbelly am I missing something?

Andyjflet

kimwp is correct,  the calculation is 50% of the Total Amount Payable, which will be on your documents. 

fatbelly

Yes that's correct. However, I think the issue is that the op wants to stop having to make the monthly repayment.

babayaga96

I took a £10,000 loan in August 2025 for the car on a 5 year term with a huge interest rate. Over a 5 year term I will be paying around £17K. Made monthly payments of £289 per month until May. As of now the settlement amount is £9700.

kimwp

babayaga96 said:

I took a £10,000 loan in August 2025 for the car on a 5 year term with a huge interest rate. Over a 5 year term I will be paying around £17K. Made monthly payments of £289 per month until May. As of now the settlement amount is £9700.

My understanding is then that your total liability is limited to 17k divided by two. IE £8,500. So if your settlement amount is £9700, then if you do the voluntary termination as recommended, then you only owe a further £1200. My personal view is if you need the car and you can afford the £289 a month, you may as well keep it until 50% is paid off. That's a big if though. What's your plan for a replacement car? (I think you said you needed one)

babayaga96

I rather manage with a bicycle than have this car and pay £289 every month for finance and not to forget £332 per month for the insurance. Now the insurance is a big issue as they are saying I will owe them money if I cancel the policy before August. 

fatbelly

That is likely true. Check your terms and conditions.

It would become another non-priority debt to add into the mix

kimwp

babayaga96 said:

I rather manage with a bicycle than have this car and pay £289 every month for finance and not to forget £332 per month for the insurance. Now the insurance is a big issue as they are saying I will owe them money if I cancel the policy before August. 

Ah sorry, you said previously "Not having a car is not an option as my job demands I have a car."