Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
Would I be correct to assume that you have not been making payments under the hire purchase agreement since you lost touch with the HP company please?
If that is correct roughly how far behind with payments do you think you are?
Hi Joshua, correct we stopped payments in February 2014, I have an email from the firm of liquidators who have all the figures
I also have a copy of the HP contract.
My dilemma is that the current market value of the car is about 5k whereas they are asking the toal outstanding of £10542.50
Thanks. Are you in a position in principle to make up these payments should they be demanded?
they have asked for
From a review of the Company’s files and bank statements, the last instalment received from your wife was on 3 April 2014. Consequently, arrears are outstanding from May 2014 to February 2015 totalling £1,975 (not including penalties of £200) and your wife is in default of the agreement, which still has 3 years left to run. The total amount currently outstanding under this agreement is £10,542.50. Please note that as the vehicle has not yet been paid for in full, title to the vehicle remains with the Company.
As the the Company has ceased trading and will shortly be subject to insolvency proceedings, we would like to discuss the possibility of agreeing to an overall settlement with your wife in order to deal with this matter.
Accordingly, please confirm whether your wife is in a position to make a settlement offer, with a view to bringing this matter to a close. If so, please let us have your best offer for a full and final settlement.
Alternatively, please confirm if you wish to comply with the ongoing terms of the agreement. Payment of £2,175 representing the outstanding arrears and penalties should therefore be made to the following account:"
I would question whether they could actually enforce the penalty of £200, as we were waiting for them to supply us with bank details.. I have emails to prove this
however, we could pay the £1975 and we could resume payment of the monthly instalments. but what what would the point be if they subsequently terminated the contract and repossessed the car
Its possible we could raise enough money to cover the current market value of the car .. of around 5k, but I don't know if they liquidators would accept 50% of the amount outstanding
My general query is, what is our legal position if an HP company liquidates? What is the position of all the customers they have who have cars in agreements?
Thanks. Are you in a position in principle to make up the missed payments?
yes we could.
Your legal position is not changed by virtue of the hire purchase companies insolvency. You continue to have a contract with the company until such time as it may be struck from the company register. Presently, from what you say, it is still being dealt with by a receiver
But I'm not going to, if the contract was terminated and we had to pay the balance. I would rather take my chances in court
Lets assume it was struct from the register, what would happen then?
Accordingly, from your perspective, the position is unchanged from what it would be if the hire purchase company was still trading. If you have missed payments (although through no fault of your own) these must be made up or you will be in breach of the agreement. If it is your desire to simply continue with the agreement as originally agreed, you can do so. The receiver is bound by the terms of the agreement just as the hire purchase company would have been had to continue trading. If this is your wish, the receiver may seek to sell the hire purchase agreement to a third party, but whatever you decide, it does not affect the agreement terms from your perspective.
I agree that penalties would be difficult to enforce if you can demonstrate that they failed to collect payments and.or were and uncontactable despite your best efforts
Ok this is very encouraging, I will probably make a ridiculously low offer for final settlement and if thats not accepted, make up the arrears and continue with payments.
BTW If I make any further email correspondence with them, should I put "WITHOUT PREJUDICE" at the top of the email?
having said all that, whilst as discussed above, you can simply elect to continue on the terms originally offered as if nothing has happened albeit you are presently doing with the receiver and should you decide to do so, the receiver may attempt to sell the agreement to a third party, which means you will potentially end up dealing with an entirely different company, you can require those terms to be abided by. Having said that because of the situation with the hire purchase company, the receiver will likely be opentwo offers in relation to the car. This seems to be the case based on the correspondence you have received. Therefore, should you wish to do so, there may be an opportunity for you to acquire the car at a knockdown price if you are able and willing to make a cash payment for it.
Sound advice. Ok thank you very much
As above, there is no requirement for you to do so, but in such situations, cash is king and receivers will often be prepared to accept fractions of debts in settlement as it is better for them to have some cash now than all the cash much later. This does not mean that the receiver will accept anything but if this is of interest to you, you could start by offering something low and then negotiate. If the receiver demands something that is too high in your opinion, you can walk away and elect to simply continue with the agreement you took out in the first place
A pleasure. Good luck with your negotiations should you decide to pursue them.
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