Problems with van finance debt

[macca]

Hi Everybody,

I'm trying to get some general information on behalf of a good friend who is in a spot of bother. I'm sorry if the details are a little hazy, and I will of course try to get any more info that's needed, I just want to try and help him out.

About 5-6 years ago my friend bought a small brand new van on finance for his work. After using it for a year or two he changed his job and no longer needed it. A friend of his sister needed a van and they entered a verbal agreement that said friend would take the van and pay my friend cash so he could continue paying the finance. The finance company weren't informed of this change and as far as they were concerned my friend was still in charge of the vehicle.

As happens with these agreements the chap started getting later and later on the payments causing my friend to incur late fees which he the chap wouldn't cover. He then disappeared and stopped paying altogether.

Around the same time my friend found himself out of work for various reasons and couldn't cover the payments. The chap still had the van and it was still registered to him according to the DVLA.

After hassle from a DCA my friend entered in to an payment plan to clear the balance of the finance (in the region of £2-2.5k I think).

The guy with the van has now come back on to the scene to say he no longer wants the van and would like my friend to take it back. It has been neglected in the meantime and has no MOT or Tax on it. My friend is talking about hiring a low-loader to collect it (it is over 100 miles away) and then continuing the payments. Of course the cost of the van being trailered home, along with making it roadworthy again and selling etc. if he decides will be quite high.

So my questions are really, does he have to take the van back and should he really be paying the finance if the van is not in his posession? It was my understanding that finance followed the vehicle and not the person and that the DCA probably chased my friend because he was easy to find and didn't argue with them?

I'm also a little worried that entering in to a payment plan with the DCA amounts to some kind of admission to the debt and he might have shot himself in the foot through paying them rather than sending them toward the guy who is the registered keeper of the van.

Can anybody offer any advice to help please?

[Sapphire]

Re: Problems with van finance debt

Hi Everybody,

Hiya, apologies for relying like this but it makes it easier for me.

I'm trying to get some general information on behalf of a good friend who is in a spot of bother. I'm sorry if the details are a little hazy, and I will of course try to get any more info that's needed, I just want to try and help him out.


About 5-6 years ago my friend bought a small brand new van on finance for his work. After using it for a year or two he changed his job and no longer needed it. A friend of his sister needed a van and they entered a verbal agreement that said friend would take the van and pay my friend cash so he could continue paying the finance. The finance company weren't informed of this change and as far as they were concerned my friend was still in charge of the vehicle. I take it they had nothing in writing then.

As happens with these agreements the chap started getting later and later on the payments causing my friend to incur late fees which he the chap wouldn't cover. He then disappeared and stopped paying altogether.

Around the same time my friend found himself out of work for various reasons and couldn't cover the payments. The chap still had the van and it was still registered to him according to the DVLA. So he signed over the van to a friend of his sister on a promise to pay and nothing else.

After hassle from a DCA my friend entered in to an payment plan to clear the balance of the finance (in the region of £2-2.5k I think). If the finance remained in your friends name then yes they would go after him for the monies.

The guy with the van has now come back on to the scene to say he no longer wants the van and would like my friend to take it back. It has been neglected in the meantime and has no MOT or Tax on it. My friend is talking about hiring a low-loader to collect it (it is over 100 miles away) and then continuing the payments. Of course the cost of the van being trailered home, along with making it roadworthy again and selling etc. if he decides will be quite high. So the 'other' person wants to offload a knackered van back to your sisters friend, and hasn't been paying for it.

So my questions are really, does he have to take the van back and should he really be paying the finance if the van is not in his posession? It was my understanding that finance followed the vehicle and not the person and that the DCA probably chased my friend because he was easy to find and didn't argue with them? As far as I know the finance agreement stays with the person even if you sell on the vehicle, I know if I sold my car then the finance would stay with me and I would still be liable.

I'm also a little worried that entering in to a payment plan with the DCA amounts to some kind of admission to the debt and he might have shot himself in the foot through paying them rather than sending them toward the guy who is the registered keeper of the van.

Can anybody offer any advice to help please?

How I see it is basically your friend is lumbered, he has to pay the finance as its in his name. The van though if it is in the other persons name is now the other persons responsibilty and your friend doesn't have any responsibility to take it back, unless of course he wants to get it done up, sell it and hopefully get rid of some of the finance.
To be honest thats not something I'd recommend as it will probably cost more to retreive it and get it repaired and ready for sale than what its worth.
My advice would be for your friend to tell the other person to go forth and multiply, work to pay off the finance and put this situation down to experience.

Then again someone else with more knowledge will probably come along soon and contradict me.

[Caspar]

Re: Problems with van finance debt

It depends to some extent on the type of agreement that was taken out. If it was a straightforward HP agreement regulated by the CCA then it was illegal for your friend to informally "sell the van" to his friend. In terms of getting any repayments from him I doubt he has a leg to stand on.

The best course of action would be to come to an arrangement with his friend, but if this is not going to happen he could go to court to prove he paid in total for the van, so although not the registered keeper he is the legal owner of the van. If he wants to reclaim possession his friend has to return it, so he has to incur the costs of getting it back.

Unfortunately I think your friend has learnt an expensive lesson. I hope someone comes along to prove me wrong.

Do double check what sort of agreement he signed in the first place.

[macca]

Re: Problems with van finance debt

Cheers for the helpful replies. I had a feeling he was probably stuck with this, but it's always worth asking just in case!

[Crispybacon]

Re: Problems with van finance debt

Cheers for the helpful replies. I had a feeling he was probably stuck with this, but it's always worth asking just in case!

Hi

Was the van on HP? If so how long was the HP agreement for and how many payments did your friend make on the van?

If your friend has made more than half the payments then he should be able to hand the van back the finance company and end the agreement (though I'm not sure how that works if he has defaulted and has entered a payment arrangement).

The finance company would then sell the vehicle and he may be left with a sum to pay but better than paying what he is at the moment.

Is he able to check the T&C's of the hire agreement?

Crispy

[macca]

Re: Problems with van finance debt

Thanks Crispy, I'll have to check with him and see if he still has the original agreement and what it says.

I've heard about the voluntary termination before but as you say not sure how it plays out since he defaulted and is in an agreement with a DCA. I suspect it's a bit different.