Default letter received after VT

[Ellis27]

Hi I hope someone can help
I read all I could on your site about VT Of my car contract. I sent recorded delivery letter stating I wished to voluntary terminate my contract with immediate effect . Company responded immediately by e-mail saying I had breached my contract - I was not in arrears- they revived my letter on 19th Jan my next payment was not due until 22nd Jan. They asked me to sign a voluntary surrender letter which I refused. They are bombarding me with phone calls. Today I have received a default letter giving me until 10th Feb to pay instalment which was due after my VT letter. Can somebody advise please.

[R0b]

Hello

First, who is the lender?

it would be helpful if you can post the email you sent exercising your VT and the response from the lender claiming you are in breach of contract as well as the default letter.

Make sure personal info is redacted.

[JoBrindle21]

Though it would be great if you can post all the correspondence. I would suggest until the car is acknowledge and the vehicle is collected you should pay all monies for your monthly payment as should you keep the vehicle insured otherwise they may have a counter claim against for breach of the agreement.

[Ellis27]

Thank you both so much for your replies but as I sent Termination letter before next instalment was due I understood that payment would not be due.
please see attachments

[R0b]

Though it would be great if you can post all the correspondence. I would suggest until the car is acknowledge and the vehicle is collected you should pay all monies for your monthly payment as should you keep the vehicle insured otherwise they may have a counter claim against for breach of the agreement.

The problem with continuing to pay the monthly instalments means that it could be determined the OP did not VT and accepted the agreement as continuing. Either the OP exercised his VT right or the lender has to give a reason why the OP is in breach of contract.

I find it highly strange that, if the OP was in breach of contract, why are they trying to get the OP to sign a voluntary surrender when they would have a lawful right to terminate by issuing a default notice? If this is the first time they are claiming breach of contract and the OP suggests that they were not in arrears, why are they suddenly claiming a breach now?

The fact that there is a breach of contract does not, in and of itself, mean the OP cannot exercise their VT right. The right itself is only lost when the contract has already been terminated.

[Ellis27]

Thank you Rob for your helpful reply what do you advise I do.

[R0b]

Well looking at the timeline of things, you say the letter was received by SMF on 17th January but payment was due on 22nd. It might be that they haven't yet processed your VT letter and the message you received and default notice letter could be automatic due to non-payment.

I would suggest that you write back to SMF and explain that you do not believe the payment is due because you have already exercised your VT right and the agreement would be terminated immediately. As they received the letter on the 17th, that is the date you consider the agreement having ended and therefore any instalments due after that cannot be enforced.

Obviously your letter mentions financial difficulties and you have referred to the fact that you have not quite reached the 50% mark but the VT right is not conditional upon you have already met the one-half rule. You can round it off by saying if they do not agree with your position, then they need to explain why the instalment is due.

Be aware, there is a risk that if SMF do not get round to processing your letters before 10th Feb, it could be that they may report your credit file as having having defaulted on the agreement. Of course this is not true and strictly speaking, they would be in breach of data protection laws by failing to ensure data i accurate and kept up to date. However, it does create another headache that you'd need to deal with.

You could, if you want to, give them a call first and then follow up with the letter as well as what was discussed on the call. If SMF do not accept your position and say you are still liable, then no need to get into a slanging match just ask them for the reason and you can address that in the letter.

If you want any feedback, suggest you post up a draft for critique before you send it off.

[Ellis27]

Thank you so much I will do as you advise and write to finance company

[JoBrindle21]

I agree Rob with what you are stating however I think its always important to fulfil your obligation. My understanding is the VT hadn't formally been agreed between the parties so Ellis27 was still receiving the benefit of the car and should keep paying for the days used up to the collection.

[R0b]

You don't need consent from the lender to VT as it is a unilateral right, and you can do that at any time so long as the agreement has not already been terminated and the final payment is not due. Consequences of termination is that you lose all rights and interest in the vehicle so you don't really receive the benefit of the car other than you have it in your possession and it needs to be collected.

If, for example you terminated your broadband contract with Virgin Media on X date, and you were waiting for them to send out a pre-paid package for you to return the router, you wouldn't continue to pay for your broadband simply because you have the router in your possession beyond the date of termination would you? You wouldn't because the service terminated on X date and the same principle applies here.

[JoBrindle21]

Point taken. Thanks Jo

[Ellis27]

Hi
I emailed finance company with regards default letter referred them to my VT letter and explained that I did not believe any payment was due. I asked them if they did not agree to please explain how an instalment is due after the date of VT.
Their reply was the attached
Today I received a letter saying I am in arrears (one instalment) and they are charging £12 late payment fee and entering it on my credit file

[Ellis27]

Sorry only meant to upload first picture

[R0b]

Don't really have much more to say about it. Either you pay up as they're suggesting or call their bluff and if they do apply a default to your credit file you will have grounds to bring legal proceedings for compensation caused by them damaging your credit file.

[Ellis27]

Thank you