Hire Purchase is a way of acquiring goods through a financial agreement. It involves choosing a product that you will then pay for gradually through regular monthly payments. However, you will not actually own the product until you have made your final payment.
This means that if you start to miss payments, then the seller has the right to take the product back without having to go through more formal channels of repossession.
How to End a Hire Purchase Agreement
You have the right to pull out of a hire purchase deal whenever you like. If you can no longer afford to make the repayments and don’t need the goods you bought, then you can pull out of the agreement.
You have to write to your creditor (it has to be in writing, they do not have to accept anything if you phone them) telling them that you want to end your agreement with them. They will write back informing you of what to do with the goods. You will either have to send them off or drop them at a specified location, like a store branch. The vendor cannot ask you to travel an unreasonable distance
If you have paid under half of the total you owe, then you might have to pay some extra money, as the vendor is entitled to a specific amount of money. If you have paid over half, it is unlikely you will be asked to pay any more. However, you will not get a refund.
Lenders may inform you that you have to pay the full amount in order to end the agreement. This is not true. In this event it is important you get in contact with the Citizen’s Advice Bureau as soon as possible.
What Happens If I Am in Hire Purchase Arrears?
If you are in hire purchase arrears, the lender has the right to repossess the item because they still own it. If you have paid under one-third of the total you owe, they can do this without a court order (unless the object in question is not stored in your private premises, a reason why motor vehicles can so often be repossessed without a court order).
After taking the good or goods, they will sell it off at auction, and any money they make will be put towards paying off your debt. If there is still money left afterwards, then you will have to pay this off yourself. If the case was taken to court you will have to pay some additional fees to cover this cost too.
If you do receive letters about possible court action, it is essential that you get in contact with us straight away. It is not too late to take action at that point, and we may be able to save your asset in question.
What to Do If You Are in Hire Purchase Arrears
If you have found that you are struggling to meet hire purchase arrears, or in fact have any other form of debt that you are not in full control of, don’t hesitate to reach out to us for help. Our staff are well-trained and knowledgeable in how to deal with a huge variety of financial problems. Regardless of your circumstances, we can create a plan that works for you.
For your own tailor-fit debt solution, call us today on 0800 808 5142.