Breach of contract.

Tiki90

Can a private creditor repossess a car (from a debtor) who has breached their contract (refusing to repay a loan).?

If so how can the creditor go about doing that?

The debtor did in fact sign a legally binding contract and added their car to the contract as collateral incase of nonpayment.

nuac

Mod
Suggest yoiu consult your solicitor.
Will leave open for general discussion subject to forum rules on legal advice

Claw Hammer

Tiki90 wrote: »

Can a private creditor repossess a car (from a debtor) who has breached their contract (refusing to repay a loan).?

If so how can the creditor go about doing that?

The debtor did in fact sign a legally binding contract and added their car to the contract as collateral incase of nonpayment.

Why not?

Mr. Incognito

I would doubt that the contract is enough to seize it and would not have been drafted appropriately.

Cars on hire purchse remain owned by the car complany until the last installment is paid so they are not seizing that which they do not already own.

You would need declaratory relief of the District Court to seize it but if the contract is clear enough it would likely be granted.

In short, no, you cant just seize someone's stuff because they owe you money unless it's drafted properly and you hold that property as security. If you held their registration papers for instance until the debt was paid then it's yours.

Right now- no.

Peregrinus

Mr. Incognito wrote: »

. . . In short, no, you cant just seize someone's stuff because they owe you money unless it's drafted properly and you hold that property as security. If you held their registration papers for instance until the debt was paid then it's yours.

Ooh, I wouldn't be sure of that at all. Simple possession of the registration papers is a strong indication that you possess some kind of charge or security interest over the vehicle which you could enforce through the courts, but that's a long way short of owning it. The registration papers that you hold, after all, actually name someone else as owner of the vehicle.

Mr. Incognito

Peregrinus wrote: »

Ooh, I wouldn't be sure of that at all. Simple possession of the registration papers is a strong indication that you possess some kind of charge or security interest over the vehicle which you could enforce through the courts, but that's a long way short of owning it. The registration papers that you hold, after all, actually name someone else as owner of the vehicle.

If they gave you the registration papers together with an assignment in the contract if the debt was unpaid you could register the car in your name. They dont scruitinise the application to change if you have the original papers.

Its no different that the deeds of a house and a mortgage held by the bank albeit in that case the bank needs to go to Court for declaratory relief and an order for possession.

Chattels though or moveable property possession of the registration papers would be enough in my view to register ownership.Once you are registered as the owner then you can seize it.

Peregrinus

Mr. Incognito wrote: »

If they gave you the registration papers together with an assignment in the contract if the debt was unpaid you could register the car in your name. They dont scruitinise the application to change if you have the original papers.

You'd need to give me a presigned transfer, as well as the registration certificate, no? Then, I could fill in the transfer with my own name as transferee, lodge the lot, and get a new cert showing me as the owner.

But, even then . . .

Mr. Incognito wrote: »

Its no different that the deeds of a house and a mortgage held by the bank albeit in that case the bank needs to go to Court for declaratory relief and an order for possession.

The fact that the bank has to go to court to enforce its security interest in land should at least raise a question as to whether someone can legally enforce a security interest over a car without going to court.

Mr. Incognito wrote: »

Chattels though or moveable property possession of the registration papers would be enough in my view to register ownership. Once you are registered as the owner then you can seize it.

Two points:

1. Possession of the registration papers is not enough to secure re-registration in your name. As pointed out, you'll need a transfer signed by the current registered owner.

2. Can you then seize the car? Well, as a matter of practicality you can seize it even before that, if you're strong enough or quick enough. The important question is, having seized it, will you succeed in defending an action by the aggreived debtor, who claims he is still the owner?

And I think the answer is: not necessarily. The loan agreement or an associated document should specify the events of default which entitle the creditor to enforce his security. Suppose the debtor thinks he has an agreement under which he has two years to pay off the loan. Half-way through the lender demands immediate repayment of the outstanding balance. The debtor declines, but continues to make payments on what he understands to be the agreed schedule. The lender completes and registers the transfer, and then seizes the car. The debtor sues, alleging that the lender had no right to do this, because he was not in default. Who wins?

The answer is, it depends on what the loan agreement and associated documentation says about the events of default, and the lender's rights when a default occurs. To the extent that the documentation is ambiguous or incomplete, it will normally be interpreted in favour of the debtor, so the londer had better be bloody sure that the events which have happened clearly constitute a default under the loan agreement, and that the terms of the loan clearly entitle him to enforce his security in that event, that his conduct and representations don't estop him from enforcing the loan in the circumstances which have happened, and that he himself has in other respects fully complied with the loan agreement. None of this is established simply by pointing to the fact that the lender has custody of the certificate of registration.

Claw Hammer

Registration of ownership of a car is not proof of ownership as indeed it state on documentation from the Registration Office. In many cases the registered owner is not the owner at all, typically in cases where the purchased of the car was financed by a loan.
The problem with seizing the car is the difficulty in selling it on without the chain of paperwork.