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If you buy goods under hire purchase (HP) - usually cars or furniture - or a
similar scheme, known as a 'conditional sale agreement', you don't own them
until you have made the final payment. Until then, they belong to the
creditor (the finance company).
If you miss payments before you've paid a third of the total amount you owe
(this figure will be on the front of your agreement), the creditor can take back
the item. They can do this if it is in a public place, so they may be able
to repossess a car, but they cannot come into your home and take furniture.
If you have paid a third or more of the total amount you owe, the creditor
must start court action to get the goods back or to get you to pay.
You will then receive a hearing date, when the court will decide whether you
must return the item or accept any offer to make payment that you have
made. You can ask for a time order under which the court can reduce the
payments to a level you can afford. The court can make a 'suspended
order', which means that the finance company can get the goods back only if you
miss payments.
If you want to avoid court action, you can write to the creditor to end your
contract. You will have to pay only half of the total amount you owe (this
figure will be on the front of your HP agreement) and the cost of repairing any
damage to the goods. But you will have to return the goods.
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last updated
16/08/07
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