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Non payment of HPI
3 Answers
I have paid off the HPI element of my vehicle loan but am struggling with the rest since redundancy. The company said that if I refuse to pay, the police can arrest me as I drive, they can take me to court and have me jailed. They also said they can attach an order to my employer to take money from my wages.
Is this true?
I'm obviously quite worried as at the moment I can't pay a thing, but if I sell the van I won't even make enough to pay it off.
Is this true?
I'm obviously quite worried as at the moment I can't pay a thing, but if I sell the van I won't even make enough to pay it off.
Answers
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I don't understand what type of loan you have. How is it split if the HPI part is paid off separately from the rest? I assume the loan is not a Hire Purchase agreement because, if it is, the lender can repossess the van.
However, unless there is something unusual about the loan the information that the police can arrest you is not correct. Loans are a civil matter and not a criminal one and the police and jail do not come into it.
The normal course of events would be for the lender to issue a County Court claim for the money owed. You would then be able to make a repayment offer to the Court and give them details of your finances. You must make an offer, even if it is only �1 per month. The Court then issues a County Court Judgement which states how much you have to pay each month. If you comply with this then the lender can do nothing more. If you don't comply, then they can go back to Court to get the judgement enforced - by bailiffs, possibly attachment of earnings (I am not sure about this one) and various other ways.
Do read the whole of your loan agreement carefully. The above is based on my understanding of the normal position for loans under the Consumer Credit Act. If there is anything in your agreement you don't understand, you should get advice from a CAB or other independent service.
However, unless there is something unusual about the loan the information that the police can arrest you is not correct. Loans are a civil matter and not a criminal one and the police and jail do not come into it.
The normal course of events would be for the lender to issue a County Court claim for the money owed. You would then be able to make a repayment offer to the Court and give them details of your finances. You must make an offer, even if it is only �1 per month. The Court then issues a County Court Judgement which states how much you have to pay each month. If you comply with this then the lender can do nothing more. If you don't comply, then they can go back to Court to get the judgement enforced - by bailiffs, possibly attachment of earnings (I am not sure about this one) and various other ways.
Do read the whole of your loan agreement carefully. The above is based on my understanding of the normal position for loans under the Consumer Credit Act. If there is anything in your agreement you don't understand, you should get advice from a CAB or other independent service.
When I took out the agreement, they said that the vehicle did not belong to me until 1 third had been paid off. That has now happened.
What worries me is that I need the van for further work, but if I can't pay it's not going to look good if I go to a new employer, and immediately am faced with an attachment of earnings from a court.
I will pay when I get another job, but I think they should freeze the account until that time to help me out.
I appreciate your help so far tho.
What worries me is that I need the van for further work, but if I can't pay it's not going to look good if I go to a new employer, and immediately am faced with an attachment of earnings from a court.
I will pay when I get another job, but I think they should freeze the account until that time to help me out.
I appreciate your help so far tho.
I think you have probably been misinformed. This sounds like a normal HP agreement, under which the vehicle can be repossessed without a Court order until one third of the payments have been made.
BUT even after the one third has been made the vehicle can still be repossessed after getting a Court order. It still belongs to the finance company until all payments have been made and you cannot sell it yourself. There is a default procedure the company has to go through before taking you to Court. This is a civil matter and not one involving the police. The details should be set out in the small print on your agreement.
You should get debt advice (CAB; CCCS; National Debtline)and help to try to get the company to accept an offer you can afford at the moment. It may be that they will agree to stop payments until you have a job but I think this is unlikely - they are perhaps more likely to accept a much reduced payment based on your unemployed income (JSA?).
BUT even after the one third has been made the vehicle can still be repossessed after getting a Court order. It still belongs to the finance company until all payments have been made and you cannot sell it yourself. There is a default procedure the company has to go through before taking you to Court. This is a civil matter and not one involving the police. The details should be set out in the small print on your agreement.
You should get debt advice (CAB; CCCS; National Debtline)and help to try to get the company to accept an offer you can afford at the moment. It may be that they will agree to stop payments until you have a job but I think this is unlikely - they are perhaps more likely to accept a much reduced payment based on your unemployed income (JSA?).
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