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Old 17-07-2007, 12:29 AM
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Default Voluntary Termination of an HP agreement-beware!

Hi all.
For 4 months now, I've been trying to resolve issues with an old HP agreement Mrs P had with GMAC.
After her disability and inability to work, money ran very short (as I was also off long term sick by then) so existed on benefits.
Default from GMAC for 1 month arrears, no lee-way, no sympathy, DCA (Close Credit/Close Assistance) were instructed as Agents.
The field agent who called on us, advised to Voluntarily end the agreement by surrendering the vehicle.
At the time, we had no chance of raising the default arrears, and the next due payment 1 week later, saw no way out and agreed.

This is where it could have ended up so dreadfully wrong.

Then, we were both very naive and ignorant of our legal and contractual standing.
On the HP agreement, it stated if you pay 50% or more of the agreement - then termination will lead to the agreement being cancelled, with no further financial liability (providing no arrears which you have been advised of).

We were supplied a triplicate form to sign, agreeing to surrender the vehicle voluntarily, and in our belief from the field agents' conversation, terminating the contract. Any shortcomings (arrears etc) we agreed to pay off 10 per month.

The last 4 months, I've SAR'd and CCA'd the DCA and original creditor GMAC to no avail.
I called today to find out just what was going on, and was advised :-

Oooh no Mrs P is still liable for all contractual payments agreed to, ie 3500. We fell through the floor, then a light switched on.
"WHat of the termination?" I demanded,
"Ooh no, the vehicle was surrendered, but the agreement still stands. You did not sign for a voluntary termination, and you still owe us after what you paid, the charges added, the sale of car at auction, a total of 3500.

"Oh nooo", told this guy what we had been advised by the field agent, blah blah blah, and advise dif he didn't remove the oustanding calculated on surrender not termination, I'd see him in court personally.
10 minutes later, I'll call you in a mo, I'll just check something.
2 mins later, he agreed the whole of the debt would be cleared, all adverse credit history will be removed, and a letter to say account closed with no liability for Mrs P at all ever more...

Moral is,
If anything is to be surrendered 'cos you can 't afford it, ensure that you are terminating under s99 of the CCA, and read section 98 through 102 before hand!
Termination ends the contract with limited liability
Surrender allow the creditor to retain the goods/sell, and still pursue you for the contractual payments agreed to.

Hope this helps
Pers
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Old 17-07-2007, 07:07 AM
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Thank you for this warning Pers. I am wondering if this should be included in the FAQ's. it could save hours of posting and reading for someone who might need to know this fact

Last edited by Dragonlady : 17-07-2007 at 07:18 AM. Reason: Correcting my grammar
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Old 17-07-2007, 07:13 AM
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What a great idea DL
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Old 17-07-2007, 09:19 AM
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All such very valuable snippets should be in a clearly identifiable FAQ
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Old 17-07-2007, 04:07 PM
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Cheers peeps, feel feel to move/cut/paste where you please.
I was just totally gob-smacked that as a lay-person, the terminology sounds so similar but means something so vastly different!
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Old 17-07-2007, 08:08 PM
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This is a template we advise our users to use when voluntarily terminating your HP agreement against a car: -

"Dear Sir/Madame

Re: Account Number (Car Make/Model and Registration Number)

I am writing to notify you that I am exercising my right to terminate the above Agreement under Section 99 of the Consumer Credit Act 1974.

The car will be available for collection on the (Date) at the above address.

According to my contract I am not liable for any collection fee.

Please confirm receipt of this request by writing to the above address.

Yours faithfully"

The car needs to be returned to the place you brought it from. In our case as the company went out of business they were charging our users 80 to collect the car. This is against the CCA hence our sentance about collection fee.
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Old 17-07-2007, 08:18 PM
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Hi Baked

Under the HP agreement, generally there is the 50% point for TAPs allowing consumers to 'walk away' from them.
There is also the 33% point at which without a court order, the creditor may not recover the car, else face re-imbursing all payments made by the consumer.

In your template, do you ask your members to request confirmation of outstanding financial liabilities, as this could be (as we found) a shocker - and may change their perspective of terminating the contract?

Cheers
Pers
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Old 17-07-2007, 08:25 PM
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Good point Pers,

I would add that in to the template.

Most of our users ask about terminating so we advise before using the template. So most are already aware of any liability.

Saying that though we have not accounted for those who just might want to use the template without posting.

Thanks for pointing that out and you are right, it is a shocker when it happens.
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Old 17-07-2007, 08:31 PM
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It's also important to have the vehicle inspected & photographed for damage. If there is any damage beyond wear & tear you should either have the repair done or at least obtain an estimate from a reputable garage (if there is such a thing).

It's not uncommon for creditors to come back demanding large sums to cover the cost of repairs for the damage that never was
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Last edited by Lefty : 17-07-2007 at 08:53 PM.
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Old 17-07-2007, 08:36 PM
Bakedalasker Bakedalasker is offline
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We are coming across that alot. We always recommend users take photos of their cars and get an inspection carried out usually by the AA.
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