Hire Purchase and the Limitations Act (Scotland)

[ChelseaR]

Hello, I am in a bit of a tricky situation here and I do not know where I stand.

I took out a hire purchase agreement for a car (which I still have) in 2009 in Scotland. I ran into personal and financial difficulty sometime in 2010, missed some payments and the original creditor stopped taking payments. The last payment made was August 2011. The original creditor was the finance arm of the car manufacturer.

I moved address in 2010. In 2016 Link Financial started bombarding me with letters at my current address out of the blue saying I owe £12k. I didn't respond. It went on for about 6 months before they said they would pass the account on to solicitors. Another 6 months went by then I received a letter from a law firm. The bullet points of the letter is that they are acting for Link Financial (the owners of the vehicle), they are instructed to recover the car and a sum of cash. They then go on to say if I don't respond a sheriff officer may serve a charge etc. They also say their clients may be willing to accept a lesser payment if I can't pay the full amount.

Is this debt considered extinguished under the Prescription of Limitations Act Scotland?

Any help or adivce is very much appreciated.

[des8]

Re: Hire Purchase and the Limitations Act (Scotland)

Hi and welcome
\\whilst awaiting the more knowledgeable beagles (it is the weekend so may be a little slow) you might like to read this: https://www.nationaldebtline.org/S/f...ing-debts.aspx

[ChelseaR]

Re: Hire Purchase and the Limitations Act (Scotland)

Hi Des8, thanks for your quick response. I'm struggling to find information directly relating to HP agreements and the limitations act. I assume they come under simple contract debt. I am wondering if the letter from the solicitor is a strong-arm tactic designed to scare people into paying. They use "may" before their threats of sheriffs and decrees.

[des8]

Re: Hire Purchase and the Limitations Act (Scotland)

Probably.... many legal firms act just like debt collectors and aren't averse to using misleading threats.

My understanding is that finance house loans (HP agreements) are simple contract debts, and the 5 Year limitation period in Scotland extinguishes the debt, not just making it unenforceable via the courts.
But please do wait for others input, in case I'm wrong!

[ChelseaR]

Re: Hire Purchase and the Limitations Act (Scotland)

Another question too. Does the Prescriptions of Limitations Act apply to starting legal action to recover the car also? Or could they still recover the car but the "debt" would be unenforceable/extinguished.

Again, thanks in advance for any help that can be provided!

[des8]

Re: Hire Purchase and the Limitations Act (Scotland)

I would guess the car belongs to the finance company. As it was a Hire Purchase the car would not become yours until the final payment was made.
National debtline have a page about HP agreements (https://www.nationaldebtline.org/S/f...bt-advice.aspx) you might find useful.

I'm tagging [MENTION=49370]Kati[/MENTION] to see if she knows anyone on here who is up to speed on Scottish law in this area.
If you still don't receive a positive response it might be worth contacting debtline.

[Kati]

Re: Hire Purchase and the Limitations Act (Scotland)

My understanding is that finance house loans (HP agreements) are simple contract debts, and the 5 Year limitation period in Scotland extinguishes the debt, not just making it unenforceable via the courts.

no acknowledgement (in writing) OR payment for 5yrs in Scotland = statute barred ... for a HP agreement it may be difficult ~ did the lender default the agreement after ONE missed payment or not until the end of the XXXyrs???

- - - Updated - - -

tagging @Debt Camel @Amethyst @charitynjw [MENTION=71570]R0b[/MENTION] (to start with) xx

[ChelseaR]

Re: Hire Purchase and the Limitations Act (Scotland)

no acknowledgement (in writing) OR payment for 5yrs in Scotland = statute barred ... for a HP agreement it may be difficult ~ did the lender default the agreement after ONE missed payment or not until the end of the XXXyrs???

Hello. Thanks for getting back to me.

The last payment was made August 2011. The default date on my credit file is 2 months after the last payment was taken.

[charitynjw]

Re: Hire Purchase and the Limitations Act (Scotland)

On the face of this, it does appear to be a regulated agreement &, if so, should now be an 'extinguished' debt.
If it were me I'd SAR the original lender for all data held.