Tweet
I am a money advisor (in Scotland) and have a client who has a Fixed Sum Loan Agreement (which I have seen sight of) that she took out in 2016 to purchase her car. My understanding is that this type of loan is not secured against the car. FCA, the lender, has already advised my client that she could sell the car herself and give them the proceeds or they are happy to uplift the car.
My client has other debts and can only afford to make a token payment at present due to her current financial circumstances. My understanding is that this loan should be treated the same as all her other debts and FCA have also therefore been offered a token payment, which they are not willing to accept.
The lender, FCA, has issued a default under the Consumer Credit Act, which I understand that they have to do.
This is what is stated on the default notice:
What we may do
You’ll have to pay the full outstanding balance on your
agreement.
We may enforce any guarantees or indemnities.
BUT IF YOU HAVE PAID AT LEAST ONE-THIRD OF THE TOTAL
AMOUNT PAYABLE UNDER THE AGREEMENT SET OUT BELOW
(OR ANY INSTALLATION CHARGE PLUS ONE-THIRD OF THE RESTOF THE AMOUNT PAYABLE). THE CREDITOR MAY NOT TAKE BACK
THE GOODS AGAINST YOUR WISHES UNLESS HE GETS A COURT
ORDER. (IN SCOTLAND, HE MAY NEED TO GET A COURT ORDER
AT ANY TIME). IF HE DOES TAKE THEM WITHOUT YOUR CONSENT
OR A COURT ORDER, YOU HAVE THE RIGHT TO GET BACK ALL
THE MONEY YOU HAVE PAID UNDER THE AGREEMENT SET OUT
BELOW
Total amount payable under the agreement: £13,922.00
Total amount paid up to the date of giving this notice: £12,208.55
My thoughts are worst case scenario that they will go down the simple procedure route (as the debt is less than £5000) and then potentially obtain a decree if no payment arrangements are put in place.
Are you able to advise whether my interpretation of this type of agreement is correct as it's the first one that I have come across.
thanks
My client has other debts and can only afford to make a token payment at present due to her current financial circumstances. My understanding is that this loan should be treated the same as all her other debts and FCA have also therefore been offered a token payment, which they are not willing to accept.
The lender, FCA, has issued a default under the Consumer Credit Act, which I understand that they have to do.
This is what is stated on the default notice:
What we may do
You’ll have to pay the full outstanding balance on your
agreement.
We may enforce any guarantees or indemnities.
BUT IF YOU HAVE PAID AT LEAST ONE-THIRD OF THE TOTAL
AMOUNT PAYABLE UNDER THE AGREEMENT SET OUT BELOW
(OR ANY INSTALLATION CHARGE PLUS ONE-THIRD OF THE RESTOF THE AMOUNT PAYABLE). THE CREDITOR MAY NOT TAKE BACK
THE GOODS AGAINST YOUR WISHES UNLESS HE GETS A COURT
ORDER. (IN SCOTLAND, HE MAY NEED TO GET A COURT ORDER
AT ANY TIME). IF HE DOES TAKE THEM WITHOUT YOUR CONSENT
OR A COURT ORDER, YOU HAVE THE RIGHT TO GET BACK ALL
THE MONEY YOU HAVE PAID UNDER THE AGREEMENT SET OUT
BELOW
Total amount payable under the agreement: £13,922.00
Total amount paid up to the date of giving this notice: £12,208.55
My thoughts are worst case scenario that they will go down the simple procedure route (as the debt is less than £5000) and then potentially obtain a decree if no payment arrangements are put in place.
Are you able to advise whether my interpretation of this type of agreement is correct as it's the first one that I have come across.
thanks
