Voluntary Termination/Surrender

**R0b** · 9th August 2017, 07:46:AM

Re: Voluntary Termination/Surrender

Following a voluntary surrender, will the sale of the vehicle by the lender at auction satisfy the 50% restriction stated under termination rights or is it only by payment?

Your confusing voluntary surrender with voluntary termination, they are not the same thing. Voluntary surrender means you are giving up the car and the lender will sell it usually at auction. The proceeds of the sale will be offset against any outstanding balance under the agreement. if the sale of proceeds don't cover the outstanding balance then you will have to pay up the remainder.

Voluntary termination is a statutory right which limits your liability to 50% of the total amount payable plus any outstanding arrears (if paid more than 50%) and an obligation to take reasonable care of the car. Provided you satisfy all of this then you will pay nothing more.

I have read that VT does not affect your credit score, however the lender can choose to place notice on your credit file to suggest you didn't finish the agreement. Is this true and is this the same with voluntary surrender?

When you VT the lender might mark your credit report as "VT" or "VS" but it should not affect your credit rating provided you have paid everything and are up to date.

If a lender by phoning to try and settle the account informs you that it is now in default and that the collection fee has been applied but i have not received any of this in writing is it binding and can I still contest it?

If its contained in the contract terms then there is a presumption that it is binding unless there is any other reason why. The lender can't terminate the agreement without sending the necessary default notice.

If I have not been able to keep up for 3 months can I still VT?

Yes, you can terminate at any point before the final payment is due under the agreement. If you have paid less than 50% and you want to VT then you can apply to the court to make an order that you do not have to pay the full 50% but a smaller amount. This is because in your situation you wish to terminate only 3 months into the agreement and it would be unfair to have a car which still has a good value attached to it plus 50% of the total amount payable. It is arguable that a much smaller sum would suffice.

I have asked for a settlement figure, can I haggle to bring this down?

You can try but the answer will more than likely be a big fat no. You agreed to take on the finance amount and its your responsibility since its in your name - you took the risk of financing it on someone else's behalf so I doubt they will just reduce the amount for those reasons. The lender has advanced the loan on the premise you agree to repay it back with interest, so they would expect you to pay up the full amount unless you exercised your right to VT or VS.

**osophi** · 10th August 2017, 02:48:AM

Re: Voluntary Termination/Surrender

Originally posted by R0b View Post

Voluntary termination is a statutory right which limits your liability to 50% of the total amount payable plus any outstanding arrears (if paid more than 50%) and an obligation to take reasonable care of the car. Provided you satisfy all of this then you will pay nothing more.

When you VT the lender might mark your credit report as "VT" or "VS" but it should not affect your credit rating provided you have paid everything and are up to date.

Yes, you can terminate at any point before the final payment is due under the agreement. If you have paid less than 50% and you want to VT then you can apply to the court to make an order that you do not have to pay the full 50% but a smaller amount. This is because in your situation you wish to terminate only 3 months into the agreement and it would be unfair to have a car which still has a good value attached to it plus 50% of the total amount payable. It is arguable that a much smaller sum would suffice.

Thank you so much Rob. I would like to exercise my right to VT. The lender has given me until 18 August to come up with the early repayment figure but await this in writing. Before I exercise my right

Do I have to catch up with the late payments?
How do I apply to the courts?
What are the fees i.e. court fees etc involved?
Are there timescales to apply to the courts?
How long does the court process take?
Do I need legal representation?
What do I say or do about the lender in the meantime?
What do I do in the car in the meantime?
How successful is this process?

**R0b** · 10th August 2017, 07:29:AM

Re: Voluntary Termination/Surrender

Morning,

1. If you have any late payments and have not yet paid 50% then you include those late payments as making up half of the total amount. If you have overpaid 50% then you will owe any arrears of instalments.

As for applying to the court, I must admit I have never done it before so I don't know the actual process for it. I would presume that you would need to make a standard application following your VT if either of you disagree on their loss sustained and whether a smaller sum than 50% would cover it. The usual cost application fee is £255 but I am not entirely sure this would fall within the small claims track (which limits your costs) and if not, there could be a possibility of a risk to legal costs. The court process can take some time and it is usually advised that up to 6 months before you get to a hearing is not uncommon - though if it is done without a hearing and on the papers then it could be faster.

You might be wise seeking initial legal advice to get an idea of the process. Some law firms offer a fixed fee advice for the first couple of hours so perhaps shop around and get some quotes. Your early repayment figure is just that if you don't pay it then the contract carries on unless either side terminates the agreement.

Thinking about it even if you do VT you could make a formal complaint to the lender and the disagree with you, then you could try the alternative route through the Financial Ombudsman and see if they make a decision which is fair. Either way you would need to get as much evidence as possible including several valuations of the car in its current condition. Another alternative could be to sell the car privately and then pay off the loan and any outstanding balance on it - do note however selling the car would amount to a breach of the agreement and would give the lender the right to terminate if they did find out, which they would want the remaining balance under the agreement.

**osophi** · 11th August 2017, 20:50:PM

Re: Voluntary Termination/Surrender

Originally posted by R0b View Post

1. If you have any late payments and have not yet paid 50% then you include those late payments as making up half of the total amount.

Thank you, above is my current situation, so just to check, I have been sent a default notice which has now lapsed. Can I still exercise my right to VT?

**R0b** · 11th August 2017, 20:54:PM

Re: Voluntary Termination/Surrender

If the agreement has not been terminated then yes, you can VT but you need to get in there asap if thats the case and I would suggest you send notice by email tomorrow. If they have terminated the agreement then your out of luck I'm afraid.

What does the terms of the agreement say about termination in default?

**osophi** · 11th August 2017, 21:02:PM

Re: Voluntary Termination/Surrender

Originally posted by R0b View Post

If the agreement has not been terminated then yes, you can VT but you need to get in there asap if thats the case and I would suggest you send notice by email tomorrow. If they have terminated the agreement then your out of luck I'm afraid.

What does the terms of the agreement say about termination in default?

The terms say "You have the right to end this agreement. To do so you should write to the person you make your repayments to. They will then be entitled to the return of the goods and a half the total amount payable under this agrrement that is ...... if you have already paid at least this amount plus any overdue instalments and have reasonable care of goods, you will not have to pay anymore". Oh my god, I didnt know all of this. I have a letter stating they have terminated my contract. If i pay the missed payments does that cancel that default notice?

**R0b** · 11th August 2017, 21:28:PM

Re: Voluntary Termination/Surrender

The default notice is the last step before they can terminate. They must terminate the agreement in accordance with the terms so if they haven't terminated yet you can still give notice to VT but you best be fast if thats what you want to do or your going to be liable for the whole of the outstanding balance.

**osophi** · 11th August 2017, 21:43:PM

Re: Voluntary Termination/Surrender

Originally posted by R0b View Post

If the agreement has not been terminated then yes, you can VT but you need to get in there asap if thats the case and I would suggest you send notice by email tomorrow. If they have terminated the agreement then your out of luck I'm afraid.

What does the terms of the agreement say about termination in default?

Originally posted by R0b View Post

The default notice is the last step before they can terminate. They must terminate the agreement in accordance with the terms so if they haven't terminated yet you can still give notice to VT but you best be fast if thats what you want to do or your going to be liable for the whole of the outstanding balance.

The terms say "You have the right to end this agreement. To do so you should write to the person you make your repayments to. They will then be entitled to the return of the goods and a half the total amount payable under this agrrement that is ...... if you have already paid at least this amount plus any overdue instalments and have reasonable care of goods, you will not have to pay anymore". Oh my god, I didnt know all of this. I have a letter stating they have terminated my contract. Is this really too late? If i pay the missed payments does that cancel that default notice?

**R0b** · 11th August 2017, 21:55:PM

Re: Voluntary Termination/Surrender

Lets just take a step back a second. You have a default notice and a letter or just the default notice?

The statement you mentioned above about the right to terminate is not the correct provision. You need to look for a termination clause somewhere further into the contract. It would say something along the lines of the lender may terminate this agreement if ...

If you post up the default notice and/or the letters you received then I can tell you what position you are in. Redact any personal info before you do.

**osophi** · 11th August 2017, 22:00:PM

Re: Voluntary Termination/Surrender

Originally posted by R0b View Post

Lets just take a step back a second. You have a default notice and a letter or just the default notice?

The statement you mentioned above about the right to terminate is not the correct provision. You need to look for a termination clause somewhere further into the contract. It would say something along the lines of the lender may terminate this agreement if ...

If you post up the default notice and/or the letters you received then I can tell you what position you are in. Redact any personal info before you do.

How can I post a picture?

**R0b** · 11th August 2017, 22:17:PM

Re: Voluntary Termination/Surrender

If you email Kati@legalbeagles.info she can do it for you. I will tag her so she is aware [MENTION=49370]Kati[/MENTION]