saddled with debt

gordon_gekko

i bought a jeep in cash this week and i know that the seller still has some outstanding debt attached to the vechile
i wrote out a letter in which the owner stated they were responsible for any debt on the vechile
i then signed it myself , had a friend as a witness sign it and finally the seller signed it ,we then each took a copy of the letter , this was all done in the sellers house

im just curious as to whether this document is credible were the seller to renague on his pledge to pay off the debt on the jeep or would i be better to get a solicitor to draw up an agreement

im pretty sure that the seller would be willing to sign a more official document but is this really nesscesery

i have bought vechiles before and never went to this trouble

TwoShedsJackson

Do you know the seller personally? How much debt are you talking about?

Personally I would never buy a car that had outstanding finance on it unless the seller was a close friend or family member who I trusted to pay off the finance.

If he decides to not pay the finance it'll be his word against yours that he ever said he would pay off the debt, and as the owner of the vehicle you'll be obliged to pay it.

Not a good idea.

gordon_gekko

TwoShedsJackson wrote: »

Do you know the seller personally? How much debt are you talking about?

Personally I would never buy a car that had outstanding finance on it unless the seller was a close friend or family member who I trusted to pay off the finance.

If he decides to not pay the finance it'll be his word against yours that he ever said he would pay off the debt, and as the owner of the vehicle you'll be obliged to pay it.

Not a good idea.

many cars are sold with debt still attached to them , my question is would getting a solicitor to draw up an agreement , cover me

btw , i sold a jeep last week and im planning to not pay off the debt immiedietly , once the bank gets paid , they wont notice any change and if they come knocking , ill just pay it off

Henry Ford III

If the debt attached to the car and was not a personal loan, you cannot just sign it away.

You should have cleared any outstanding finance, and paid the seller the balance.

Fey!

Has the seller a personal loan for the jeep or finance? If it's finance, then the finance company owns the car. If it's a personal loan, it's greyer.

BeardyGit

Really bad idea Gordon. You should have insisted on paying off the balance of the finance on the car you bought it, directly to the finance company, and paying the seller the difference (if any) in cash.

I'm sorry to say this but you really should have know better. It's not like this very topic isn't regularly discussed right here on boards.....

Gil

gordon_gekko

Gil_Dub wrote: »

Really bad idea Gordon. You should have insisted on paying off the balance of the finance on the car you bought it, directly to the finance company, and paying the seller the difference (if any) in cash.

I'm sorry to say this but you really should have know better. It's not like this very topic isn't regularly discussed right here on boards.....

Gil

i dont mind being told that what i did was not the wisest on the face of it

what annoys me is that no one has answered my question as to whether a solicitors drawn up agreement would cover me
if no one knows thats fair enough , ill check the solicitors forum if indeed there is one

astrofool

ask a solicitor? everyone here will just be guessing.

landydef

it might be worth the 35 quid to check it on motorcheck.ie

ciarsd

Usual method would've been to give the seller 2 drafts. 1 made out to the finance company, for the outstanding finance figure to clear it, and the other with the balance for the seller.

Going to a solicitor is going to incurr cost, bumping up the time, effort and cash needed for buying your new motor.
Even if you took this route, there is still nothing stopping the seller from defaulting on his/her obligations. The only use your solicitor issued agreement would then have, would be in court - which in turn means more time, effort, cost.

Not worth it, IMO.

January

Or €30 if you're an AA member on www.aaireland.ie/car-data-check/

JHMEG

landydef wrote: »

it might be worth the 35 quid to check it on motorcheck.ie

How will that answer the OP's question?

landydef

it wont answer the question but it would tell the OP how much debt is owed on it
just sayin it might be worth it for the sake of 35 quid

maidhc

gordon_gekko wrote: »

i dont mind being told that what i did was not the wisest on the face of it

what annoys me is that no one has answered my question as to whether a solicitors drawn up agreement would cover me
if no one knows thats fair enough , ill check the solicitors forum if indeed there is one

It depends on the kind of finance.

If the car was purchased on HP, then the HP co owns the Jeep. It was not in fact the sellers to sell.

If the car was bought using a personal loan, and the seller holds title to the vehicle, then there is no problem, the issue of the finance is between the seller and his bank.

gordon_gekko

a little more info

i bought the jeep for cash and got it cheaper for that reason , the debt on the jeep is more than i paid for it in cash , the reasons the seller was ok with this is in my opinion down to the fact that the young man who owned the jeep didnt actually finance it , it was his mother who is the wife of a large potatoe farmer , she was the one who had the final say on the price of the jeep , in fact when i 1st enquired the young owner told me he was looking 31k , i told him i had 26 in cash from a combination of cash i got from a sale of a jeep myself a few days previous and some money i had in the house along with some i withdrew from bank

he told me there wasnt a hope at that money but must have talked to his mum who saw that cash was woth more than a cheque ( it is very often to people who have large incomes ) so i got a call back in a short while and was told by the young fella to go over and see his mum and him

as regards the debt most definatly following me if its a hire purchase , this is not entirely correct , i myself havent paid off the debt on the jeep i sold a week ago , i sold it for all cash , perhaps foolishly the buyer never even asked whether there was any debt on the jeep
i checked with my accountant and he told me that as long as the bank gets paid every month , they dont care who now owns the jeep
there is 15k left on the jeep i sold and i have 2 yrs and 4ths left on the finance deal , the interest on this should i just pay it back over the remaining 2 yrs is 700 euro ( checked with bank ) and i can write this off against tax so untill somoene rings me up telling me it has to be wrote off or the new owner decides to sell the jeep i sold to him on again , i will just continue to pay off the loan every mth

this is what i hope the people i bought the jeep off will do aswell and the crux of my question was if the home made document i drew up isnt worth a fiddlers , would one drawn up by a solicitor be credible in a situation like this

it is my belief that unless someone defaults on there payments in a hire purchase agreement , the hire purchase company do not care who owns the jeep, they dont watch the change of ownership and follow accordingly

i do realise however that should my seller default , then i am saddled with debt and i would then even with a solicitors agreement for a while be forced to cough up even i was going to go to court with previous owner

endplate

Well that's all clear now

April Raine

TwoShedsJackson wrote: »

If he decides to not pay the finance it'll be his word against yours that he ever said he would pay off the debt, and as the owner of the vehicle you'll be obliged to pay it.

But there is a letter and a witness

gordon_gekko

April Raine wrote: »

But there is a letter and a witness

both the previous owner and his mum who has been financing the jeep both signed the home made document and i and a mate of mine also signed it and both the seller and i retained copies of this signed homemade document

my only concern was that maybe this home made document would not be official enough
i will ring my solicitor on tuesday and ask them , knowing them they will say i need a document drawn up by them , pimping for work as they always are
il also ring my accountant again to see if debt automatically follows a new owner like some in here have suggested , as i said , he told me as long as there is no default on payment , dont matter who is paying
if he is wrong , then the new owner of my jeep will sure be angry in a short time

cashmni1

if you took out a HP agreement with a bank for the purchase of your first jeep, you are responsible for the debt. Forever. Until it is paid off, of course. The Lender doesn't care what happens to the vechile. They just want payment.
I am not sure how the bebt would follow a car/jeep if the owner of the financed debt could default/skip on the payments and get away with it if the car/jeep was sold? That donsen't make any sence.
I am not sure about this, it surely would depend on the type of loan or finance.
Anyway, yes a solicitors letter will stand in court. Get it for the sake of it.
BTW,
don't wait for the finance company to contact you. My GF had a nasty experience in a privious relationship over joint ownership of the finance of a car. Big mistake to think the finance company will come looking for you. More often than not, they will write off the bad debt and your credit rating goes down the tubes.
It takes a long time to sort it out with the credit bureau. It's a fu*king nightmare actually.

maidhc

gordon_gekko wrote: »

it is my belief that unless someone defaults on there payments in a hire purchase agreement , the hire purchase company do not care who owns the jeep, they dont watch the change of ownership and follow accordingly

The HP company OWN the vehicle until the final €0.01 is paid. No they don't care who drives it, but it is theirs. If the person you bought the jeep from stops the repayments (as he will do), then as far at the HP co is concerned they will call in their security and take away the jeep. You can then pursue the person you bought the jeep from through the courts, but I do wish you luck with that venture.

No document will be any use whether drafted by you or a solicitor unless one the signatories is an agent of the HP company.... because the are the legal owners of the vehicle!

(I should add, in response to cashmni1, the HP co can pursue the seller (e.g. the original owner who signed the HP agreement), but they also have an action against the person who buys a vehicle with HP finance outstanding. It is essentially the same action if the vehicle was stolen. The only person guaranteed to get burnt is someone who buys a vehicle with HP finance outstanding.)

cashmni1

April Raine wrote: »

But there is a letter and a witness

It is not an official court document. I would doubt if it would ever be legally binding.

gordon_gekko

maidhc wrote: »

The HP company OWN the vehicle until the final €0.01 is paid. No they don't care who drives it, but it is theirs. If the person you bought the jeep from stops the repayments (as he will do), then as far at the HP co is concerned they will call in their security and take away the jeep. You can then pursue the person you bought the jeep from through the courts, but I do wish you luck with that venture.

No document will be any use whether drafted by you or a solicitor unless one the signatories is an agent of the HP company.... because the are the legal owners of the vehicle!

i dont know if this vechile is a HP deal
you dont know for certain that the seller will default on his payments
also what you are saying is in direct contradiction to what my accountant has told me

are you an accountant by any chance

cashmni1

maidhc wrote: »

The HP company OWN the vehicle until the final €0.01 is paid. No they don't care who drives it, but it is theirs. If the person you bought the jeep from stops the repayments (as he will do), then as far at the HP co is concerned they will call in their security and take away the jeep. You can then pursue the person you bought the jeep from through the courts, but I do wish you luck with that venture.

No document will be any use whether drafted by you or a solicitor unless one the signatories is an agent of the HP company.... because the are the legal owners of the vehicle!

(I should add, in response to cashmni1, the HP co can pursue the seller (e.g. the original owner who signed the HP agreement), but they also have an action against the person who buys a vehicle with HP finance outstanding. It is essentially the same action if the vehicle was stolen. The only person guaranteed to get burnt is someone who buys a vehicle with HP finance outstanding.)

There you go, questions answered.
HP co owns the jeep. Thats how the debt follows the jeep.

maidhc

gordon_gekko wrote: »

i dont know if this vechile is a HP deal
you dont know for certain that the seller will default on his payments
also what you are saying is in direct contradiction to what my accountant has told me

are you an accountant by any chance

When I'm on boards, I am a mere boards user and don't hold myself out to have any special knowedge.

What I am saying is there is little incentive to keep up repayments for a vehicle you don't own (although I take your earlier point re tax and the fact some people are honest... although I'm not sure that scheme would survive an audit!)

As I said, if the jeep was bought by virtue of an personal/business loan, then you are in the clear. The debt rests at the feet of the person who took out the loan. Hire Purchase is what the name suggests. It consists the hiring of a vehicle with the option to purchase it outright for a small sum at the end of the period. Just like you can't sell on a car you hire from Avis or Hertz, you cannot sell on a HP vehicle without the necessary consent.

Your accountant is of course correct, once the repayments are kept up, the finance house won't be too worried... but that is the issue!

gordon_gekko

cashmni1 wrote: »

There you go, questions answered.
HP co owns the jeep. Thats how the debt follows the jeep.

so because some annonymous poster on boards says the hp owns the jeep , you conclude that is how it is even though my accountant says as long as the payments are made , it doesnt matter who owns it

maidhc

gordon_gekko wrote: »

so because some annonymous poster on boards says the hp owns the jeep , you conclude that is how it is even though my accountant says as long as the payments are made , it doesnt matter who owns it

I think you are mixing up the concept of registered owner and legal ownership. Being the registered owner of a vehicle does not mean it is yours to sell. Your accountant is correct, it is when the repayments stop the sh1t hits the fan.

Read the second paragraph here:
http://www.citizensinformation.ie/categories/money-and-tax/personal-finance/loans-and-credit/hire_purchase

Churchy

Geez Gordon what a mess.

(Sensible thing to do imo would have been to pay off your own finance with the cash you had and continue to drive your old jeep.)

Everything will be fine until a payment is missed - then things will get very messy very quickly. Finance company will want paid or their collateral ie your "new" jeep.
If your buyer tries to part-ex or finance your old car in any way it will come up as outstanding finance and you can expect him at your door.

gordon_gekko

Churchy wrote: »

Geez Gordon what a mess.

(Sensible thing to do imo would have been to pay off your own finance with the cash you had and continue to drive your old jeep.)

Everything will be fine until a payment is missed - then things will get very messy very quickly. Finance company will want paid or their collateral ie your "new" jeep.
If your buyer tries to part-ex or finance your old car in any way it will come up as outstanding finance and you can expect him at your door.

im not worried about the sale i made of a jeep not fully paid off , i trust myself to make the payments , i will make a few calls next week and also phone the buyer of my jeep to tell him if he decides to sell on the jeep i sold him last wk , that i will be happy to pay off the debt still on my own jeep

Henry Ford III

This is a real mess.

You sold a car that you didn't own, and bought another but not off the owner, and are relying on it's former renter to keep up payments in order to keep you behind the wheel.

This'll all end in tears I tells ya.

markymac

endplate wrote: »

Well that's all clear now

I'll second that!!!!

gordon_gekko

Henry Ford III wrote: »

This is a real mess.

You sold a car that you didn't own, and bought another but not off the owner, and are relying on it's former renter to keep up payments in order to keep you behind the wheel.

This'll all end in tears I tells ya.

il pay off the debt on the jeep i sold when the banks reopen on tuesday
i sent off the change of ownership on thursday so it should be ok

as regards the jeep i just bought , i was talking to the people who sold it to me yesterday evening

BeardyGit

gordon_gekko wrote: »

il pay off the debt on the jeep i sold when the banks reopen on tuesday
i sent off the change of ownership on thursday so it should be ok

as regards the jeep i just bought , i was talking to the people who sold it to me yesterday evening

And?

gordon_gekko

Gil_Dub wrote: »

And?

they said they would clear the debt

i explained to them that they could end up with a ****ty credit ratting if they didnt

BeardyGit

Good man. Hope they get their act together. I know a guy who ended up being stung after he bought a car with finance outstanding. He ended up losing the car and never got any money back from the seller, a former partner of his.

Anyway, best of luck,

Gil

gordon_gekko

Gil_Dub wrote: »

Good man. Hope they get their act together. I know a guy who ended up being stung after he bought a car with finance outstanding. He ended up losing the car and never got any money back from the seller, a former partner of his.

Anyway, best of luck,

Gil

theyve assured me they will pay it off , i will check cartell next week to see if they have , if they have not , i will have to test them to see if they are liars
if they fail the test , the situation will have to move into a new and more serious phase , wont worry untill i have to , will ring my solicitor tomorrow to find out is the home made document they plus myself and my witness signed stating they were responsible for any finance on the vechile worth the paper its printed on
besides if they were to default on payments , its not only me who would be hurt , they could end up with a ****ty credit ratting and i wouldnt imagine that would be any help to a big potatoe grower, they have huge machinery and i assume they use banks all the time

even rich people dont need a credit ratting problem

Steve

Gordon, the issue still remains that if it was HP finance then the car was not theirs to sell.

I could have sold you O'Connell bridge and signed a letter saying I promise to pay for it sometime - don't think it would hold up.

Our man in Havana

Can the owner (finance house) repossess the goods?

The finance house can only repossess the goods under certain circumstances. If the consumer has not yet paid off one-third of the total hire purchase cost, the owner can repossess the goods at any time without taking legal action against the consumer.

However, if the consumer has paid one-third or more off the total hire purchase cost, the owner cannot repossess the goods without taking legal proceedings. Any deposit that is paid at the start of the agreement or the value of any trade-in for example, is taken into account in calculating one third of the cost.

If this "one-third" rule is breached by the owner, the consumer is entitled to end the agreement and can seek a refund of all payments made.

Now if the car is sold off to a 3rd party, it leaves the finance company in a difficult position as they must sue the original buyer for the car back. It would be very difficult to seize the car from the 3rd party without a court order first.

Jip

Is it just me that sees the irony in the op going by the name of Gordon Gekko ?

Our man in Havana

Jip wrote: »

Is it just me that sees the irony in the op going by the name of Gordon Gekko ?

http://en.wikipedia.org/wiki/Gordon_Gekko

Santa Claus

gordon_gekko wrote: »

theyve assured me they will pay it off , i will check cartell next week to see if they have , if they have not , i will have to test them to see if they are liars

I don't know how quickly cartell is updated with finance history etc. It may take a month or two to see the finance is cleared.
Why not just find out who the HP agreement is with and ring them next week to make sure it has been cleared....best to get it straight from the horses mouth so to speak !

maidhc

Bond-007 wrote: »

Now if the car is sold off to a 3rd party, it leaves the finance company in a difficult position as they must sue the original buyer for the car back. It would be very difficult to seize the car from the 3rd party without a court order first.

But a court order will issue as a matter of course!

The 3rd party has absolutely no rights unless (and I am open to correction, it has been ages since I have dealt with this stuff) he bought as a purchaser for value without notice from a person other than he with whom the HP contract was made.

Our man in Havana

Still it is very difficult for them to get it back from a 3rd party.

ninty9er

This whole thread is pointelss.

At this point we still haven't calrified if it was ACTUALLY

a) A HP Agreement.
b) A personal loan guaranteed by the kid's mammy.
c) A car loan guaranteed by the mammy.

b) and c) may relate to the car, but the payment on them has nothing to do with it, but in the case of a) The car belongs to GE/Woodchester/AIB/Ulster Bank/anyone else you care to mention. They can lift the car from anyone regardless of whose name is on the HP agreement. The car belongs to the finance house, same as a house belongs to a bank or building society until a mortgage and all other loans secured on it are cleared.

Seems like a storm in a teacup to me. Sounds like a car loan to me.

Our man in Havana

They can lift the car from anyone regardless of whose name is on the HP agreement. The car belongs to the finance house, same as a house belongs to a bank or building society until a mortgage and all other loans secured on it are cleared.

I would hope that they serve a court summons first and give the person in possession a fair hearing. The days of the knuckle dragging Neanderthal repo man stealling a car in the dead of night are a thing of the past.

ninty9er

Bond-007 wrote: »

I would hope that they serve a court summons first and give the person in possession a fair hearing. The days of the knuckle dragging Neanderthal repo man stealling a car in the dead of night are a thing of the past.

They serve a summons on the person who the agreement was signed with AFAIK. The average Leaving Cert Business book will give more detailed info than me.

But a repo man would not be stealing the car as he or she would be acting on the instructions of the owner (HP company), same way as banks can serve notice of foreclosure on a house, once the notice is up they can enter and change locks.

Financial Regulator wrote:

How hire purchase works

With hire purchase, the store or garage acts as an agent for a finance company and earn commission to arrange the finance for you.
When you use a hire purchase agreement to buy a car, for example, the motor dealer sells the car to the finance company, which in turn rents the car to you for an agreed period of time in return for a set monthly repayment over a number of years.
During the agreement, you can use the car but the finance company actually owns it. At the end of the agreement, the finance company passes ownership of the car to you, provided you have made all the repayments.
You can buy the car back from the finance company at any time during the agreement by paying a 'settlement figure'. This is calculated as the remaining instalments you owe less a 'rebate'. The rebate is a refund of some of the interest due if you kept to the original term. But, if you pay off the finance early, you will not save as much in interest as you would with a personal loan.
With some hire purchase agreements, the monthly payments are not evenly spread out and you may be paying less in the earlier months of the agreement. This may result in a large final payment at the end of the term, known as a balloon payment. Make sure you will be able to meet this payment as you will have to do so in order to clear the debt and become the owner of the goods.
If you cannot clear your debt in the agreed time, your credit rating may be affected and this can make it more difficult for you to get a loan or mortgage in the future. And, the finance company may have the right to repossess the car or other goods if you cannot pay in full.

They don't seem to offer a lease explanation though

maidhc

Bond-007 wrote: »

I would hope that they serve a court summons first and give the person in possession a fair hearing. The days of the knuckle dragging Neanderthal repo man stealling a car in the dead of night are a thing of the past.

Fair hearing, but not a leg to stand on!

ninty9er

maidhc wrote: »

Fair hearing, but not a leg to stand on!

Exactly, the HP company never had a legal agreement with the current "possessor" of the car and therefore has no obligation as far as a court is concerned.

Our man in Havana

What I meant was the HP company would have to serve notice on the current possesor and seize the car with a valid court order during daylight and not seize it at 3am with no prior notice. That is all.

Steve

ninty9er wrote: »

Exactly, the HP company never had a legal agreement with the current "possessor" of the car and therefore has no obligation as far as a court is concerned.

So if someone borrows your car and then sells it you have no legal right to get it back:rolleyes:

If you sell something you do not own it's a crime - AKA fraud.

Steve

Bond-007 wrote: »

What I meant was the HP company would have to serve notice on the current possesor and seize the car with a valid court order during daylight and not seize it at 3am with no prior notice. That is all.

Why in daylight?
Why should they give prior notice?

Our man in Havana

If you sell something you do not own it's a crime - AKA fraud.

But are the cops liable to do anything about it?