Hello to all Legal Beagles

[Fedbev21]

I've just joined and first would like to say Hello to everyone .


I am hoping someone can give some guidance on the subject of Voluntary Termination of my PCP due to the fact unfortunately I am on long term sick and have now gone onto half pay and will not be able to continue the payments of £219.26 as well all my other bills. I am not near the half way amount which I could give back without a problem.
I have informed the dealer of my situation as they said they would part exchange for £8000 and put it on the forecourt at £10,000 and guarantee it would be gone in a week.
They don't seem to realise and keep going on about getting another New car which will not change my situation.


Is there anything I can do , to help my situation ?

[EXC]

Re: Hello to all Legal Beagles

I'll ask [MENTION=71570]R0b[/MENTION] if he can suggest anything.

[R0b]

Re: Hello to all Legal Beagles

Hello, just a few questions to establish first of all.

What is the total amount payable under the agreement?
How much have you paid so far?
Is GAP insurance included in the agreement?
How much could you afford to pay of the £219.36 whilst still being able to live appropriately?
Do you want to keep the car or can you do with getting rid of it and use other modes of transport?

I'm thinking of two possible options both with different outcomes depending on what you say to the above questions.

[Fedbev21]

Re: Hello to all Legal Beagles

Hi R0b
First thank you for your quick reply.
Amount shown on my agreement is £13,849
Balance as at 8th June 2017 is £8,805.94
I do not have GAP
I could pay £120 - £150 a month
I do love my Suzuki but also I am suffering from a form of PTSD , mine is Complex Trauma Syndrome and going out near crowds etc is a no,no - so I do need to get to all my appointments each week ( even going in the car, raises my anxiety ) something that's is reliable and gets me from A to B.

I've probably waffled on too much, I do apologise
Fedbev

- - - Updated - - -

Sorry if I've got your name wrong
Fedbev21

[R0b]

Re: Hello to all Legal Beagles

Thank you for that Fedbev, obviously you will have to make a decision yourself but from the information you've given there seems to be two available options.

Option 1 - Terminate the agreement under voluntary termination provisions
As you have already suggested in your first post, you can terminate the agreement which that you return the car and your liability is limited to 50% of the total price payable under the agreement. In your case, you have paid £5,043.06 to date so you would be liable to pay £3762.88 (providing the car is in reasonable condition). Now you do not have to have paid the 50% before you terminate although some lenders might argue otherwise but that is something you should be prepared for. The main issue for you is the ability to repay the amount, which lenders would generally expect to be paid within a reasonable time, normally 14 days but could be up to 28 days if agreed.

Of course that would be unrealistic given your circumstances however as the agreement is regulated by the Consumer Credit Act, lenders are obliged to follow the FCA rules. The particular rules applicable to you are in the CONC Handbook and more specifically CONC Chapter 7 (Arrears, default and recovery). See link here -> https://www.handbook.fca.org.uk/hand.../?view=chapter

I would suggest you read Chapter 7 so you can familiarise yourself with what lenders should and shouldn't be doing when someone is having financial difficulties. You might note that next to each point, there is a letter R and a letter G whereas the letter R is a rule by which lenders are legally obliged to follow and the letter G does not legally oblige the lender but is considered guidance as to how to comply (though they can comply still by doing it in a slightly different way). I have only skimmed the Chapter but you might want to have a particular focus on 7.3, 7.10, 7.12 and 7.14 which could be relevant to you.

The point I am making is that even though you are unable to make the payment in full, lenders are obliged to take your current circumstances into account and give consideration to it as opposed to taking a hard line and demanding the payment in full which could be considered unreasonable. Of course if they do become aggressive and seek the full repayment ignoring what you have told them then you can make a formal complaint and if it is not resolved to your satisfaction you could take it further and complain to the Financial Ombudsman. The FOS is an alternative to going to court and is free of charge but more importantly has the power to award compensation (albeit it not a great amount usually up to £300 but can award more in exceptional circumstances) if it feels the lender has been unreasonable in the way it has treated you.

I would expect the lender to say that you need to provide their own version of a statement of expenditure detailing your income and outgoings but this can be intrusive and might list specific things rather than everything. I would normally resist offering to send something like that as there is no legal obligation to do so however you could make a reasonable offer like you mentioned before (starting low end e.g. £120 which is over half the normal instalment). On the other hand, if you complained to the FOS you may wish to disclose your income/expenditure to them on the condition it is not released to the lender for privacy reasons and let the FOS make a judgment on whether it is reasonable.

If you went down this route, there are some templates that can be used to give notice to terminate (http://www.legalbeagles.info/forums/...on-Your-rights) but it may need adapting slightly to explain that you are unable to pay the amount in full and are prepared to pay X per month. Alternatively, you may wish to send a separate letter on this in more detail.


Option 2 - Making an application to the court for a Time Order
In short, a time order is available to a debtor in certain circumstances such as receiving a default notice or arrears notice or when the lender initiates legal proceedings to enforce the agreement. It gives the court the power to give the debtor more time to repay the outstanding balance. Of course before the lender issues proceedings you could put them on notice that you would intend on applying for a time order and thus suspending their any proceedings they issue. There has been previous cases where the courts have granted a time order of up to 15 years (circumstances dependent) so by you offering something like £120 over 3 years would seem reasonable. The court also has the power to allow you to keep the car whilst you are on the time order but at the same time, the court also has the power to revoke the order leaving the lender to enforce its right to payment - I think a good reasonable would be needed to do this but nonetheless something to be aware of.

This route does involve an initial cost for the application of £255 and another downside to this is that you are likely to be paying more than option 1. Even if you exhausted option 1 right through to the FOS but to no avail, I think a time order would still be available if the lender initiated legal proceedings, though you would owe the full outstanding balance as opposed to 50% of it under the VT option. My view is that this should be considered as an option but not first choice, though it depends on what is right for you.


Summary
I think your best bet might be to go down option 1 mainly because you are going to be repaying the least amount of money back to the lender and because you are in financial difficulties, this seems to be the most sensible thing to do. Also if your complaint reached the FOS stage, they look at what is fair and reasonable and given your current situation you might be considered as a vulnerable person with financial difficulties and so the lender ought to have been more considerate (something the FOS may not take kindly too if they are too aggressive). When they reach their decision you can either accept it which is legally binding on both parties, or you can reject it and the lender would need to issue proceedings to recover the sum of monies outstanding.

As I said from the beginning, the choice is ultimately yours but you can still freely negotiate with lenders to reduce the payments albeit you will still owe the same amount but you can get to keep the car unless you breach that payment agreement the lender will probably look to seek full payment of arrears and less likely to agree to continue with the reduced payments. So there are both positives and negatives, you have to weigh up what is best for you in the longer term.

[Fedbev21]

Re: Hello to all Legal Beagles

Thank you so much for your reply and options + summary, which I agree looks the better way to go. I really appreciate your time and explaining this in a logical way.
I will let you know how it all goes
Fedbev21