Log book loans in an IVA

[adam090376]

Hi Melanie
I have the log book paperwork in front of me and there is a bill of sale. What does this mean? I know Thomas Charles had some doubts about keeping the log book and felt it may even be illegal for the loan company to do this. Maybe these loans do need to be looked into just in case their is a legal arguement somewhere and the case of the loan needs to be clear is it secured or unsecured?

[Storm]

The Bill of Sale means you have sold the vehicle to log book loans.

Technically / legally two transactions have taken place.

1. Bill of Sale - means you have sold the vehicle / transfered title to them for a consideration.

2. The credit agreement has two considerations -

a. It is a Fixed Sum Loan Agreement so that you do not have any rights in respect of voluntary termination of the agreement. Under a HP agreement there are some rights inferred because it is a Hire Purchase agreement for example you are entitled after paying 50% of the loan to terminate the agreement and hand the car back.

Also with Hire Purchase once you have paid 50% the method of repossession is much more long winded - a lender has to seek a return of goods order.

b. The period of the loan is very important. The fact that the maximum period of the loan is 50 weeks means that certain implied rights of the Consumer Credit Act are removed.

The structure of these transactions has been challenged in the courts but as far as I can see they are legally sound....... there may be some lawyer out there that would like a challenge.

What I am aware of Adam is that these companies are ruthless. Before you go rattling cages get the loan you agreed to repaid and ownership of the vehicle.

[adam090376]

Thanks for that Storm
Agree with you on all the points except one. My loan term was for a peroid of 78 weekly payments not 50. Does this change anything? I am not intending to do anything until the loan is paid but it has just got me interested now the experts are raising questions.

[adam090376]

Dear Experts(Storm)
Just wanted to know if the 78 and not 50 week term on my log book loan changed anything?
Thanks for your advice.

[Storm]

Not really - its relates to consideration periods etc and where the loan can be signed.