They intend to terminate my car hp agreement

[Endsmeet]

My Iva was accepted last wk and I have a car with Black Horse finance and I owe approx £1900.
The HP agreements were declared in my proposals and I am going to continue with them with the ok of my creditors.

I have just received this letter this morning:
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This notice is served under section76(1) of the consumer credit act 1974, Under the terms of your agreement with us, we are entitled to terminate your agreement if you make an application for a voluntary arrangement.
On the 9th August 2007 you made an application for a voluntary arrangement and on 2nd September we intended to terminate your agreement and to recover possession of the goods.

This notice will take effect on 2nd Sept as notice of termination of the agreement

BUT IF YOU HAVE PAID AT LEAST ONE THIRD OF THE TOTAL AMOUNT PAYABLE UNDER THE AGREEMENT SET OUT BELOW( OR ANY INSTALLATION CHARGE PLUS ONE-THIRD OF THE REST OF THE AMOUNT PAYABLE) WE MAY NOT TAKE BACK THE GOODS AGAINST YOUR WISHES UNLESS WE GET A COURT ORDER. IF WE DO TAKE THEM WITHOUT YOUR CONSENT OR A COURT ORDER, YOU HAVE THE RIGHT TO GET BACK ALL THE MONEY YOU HAVE PAID UNDER THE AGREEMENT SET OUT BELOW.

(i) total payable under the agreement £5,635.35
(ii) total paid at the date of this notice £3726.25

IF YOU HAVE DIFFICULTY IN PAYING ANY SUCH SUM OWING UNDER THE AGREEMENT YOU CAN APPLY TO THE COURT WHICH MAY MAKE AN ORDER ALLOWING YOU OR ANY SURETY MORE TIME
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What do I do? I thought that once the IVA had been accepted that my car albeit not included in the agreement was safe.
I can-not get thru to Black Horse till Monday and have left a message with my I.P.
I am so worried now, really really so.
I can-not lose my car for obvious reasons

[catullus]

IVA's only address the position of unsecured creditors and, once approved, prevent unsecured creditors from taking further recovery action.

Unfortunately they cannot do the same thing for creditors that have security and an HP contract gives Black Horse the security of the vehicle. In the circumstances, it appears from the letter that they intend to recover the vehicle which is quite unusual because your proposal should have provided for you to continue to make the payments on the HP contract which normally would be sufficient to stop repossession.

If they did recover the vehicle and there was a shortfall after it had been sold then the shortfall would fall in to the IVA and you would not be responsible for paying it directly.

I suggest that you contact BH as quickly as you can to draw their attention to the fact that you intend to continue to make the payments in the IVA and to ask them why they have decided to repossess.

If this doesn't move them, all that you can do is to ask them what you would have to do to stop repossession and then take this to your supervisor to see how it would affect your IVA.

[Endsmeet]

I do intend to continue with the payments, my proposals even included the final double month payment so I can't understand why they are taking this stance.
I can-not get in touch with Black Horse as it is a Sat and the office isn't open till Monday.
I am so scared I am actually shaking, what do I do?

[catullus]

Do what I said above, on Monday.

Take each day as it comes and try not to worry too much, there may be an easy way round this.

I'm sure that they really don't want to repossess.Lots of costs involved and could cause them a loss that otherwise they wouldn't suffer.

[Endsmeet]

Thanks for your advice, Monday is such a long way away and I had my 1st decent nights sleep last wk in months and now this....

[MelanieGiles]

This is the first time that I have seen a HP company wish to repossess a vehicle once a customer has entered into a voluntary arrangement. Like Catallus has already said, it may be that there is some misunderstanding, and as you appear to have paid over more than one third of the payments, their own terms and conditions seem to suggest that this will not be possible in any case.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Endsmeet]

I really can't understand their stance on this, I have agreed to continue with the payments and there has been no interruption to this during my IVA application.
I just hope and pray that it is just a misunderstanding or lack of communication on their behalf but its going tear me apart having to wait till Monday to find out.

The only thing I'm thinking of is that the letter says that they are aware that I have applied for an IVA but maybe they are unaware that it has been accepted and are not sure that I will continue with my agreed payments so they are thinking that I am not going to carry on with them.

What worries me is that as Melanie says that its this first time she's heard of this but there is always a first time for everything [:(]

[Storm]

Firstly they can't reposses the vehicle without a Return of Goods order from the court which will require a hearing.

Applying for an IVA would not have breached the agreement..... only when it is accepted. (This is a standard clause in all HP agreements)

Blackhorse have a bad debt problem... there underwriting has tightened in the last month or so and there collections activity has switched to agressive collection after 1 payment missed.

Industry feedback indicates a number of lenders will be taking this stance going forward amid concerns re the number of failing IVA's.

[Endsmeet]

I still can't understand why they are doing this, so they are aware of my IVA acceptance but because I have paid over a third of the agreed finance they will have to pay me all the monies back if they take it without my consent unless they get the court order.

All of this seems odd as firstly I have agreed to carry on with the payments and have not missed one to date, secondly obviously its going to cost them to obtain the court order/return of goods order and it all seems odd considering I owe them approx £1900 and it may cost them close to that anyway.

But from my position, its not sounding too good to keep hold of my car does it?
This is getting worse by the min[:(][:(][:(]

[Storm]

You would normally get a visit from a collection agent to see if you will surrender the car. You need to say NO - they have no right to recovery under the agreement no matter what they say !!

They would then seek a Return of Goods Order which will take + 28 days to get so its going to take a couple of months for them to get the vehicle.

When you add all the costs together and the amount the vehicle will be sold you could end up with a shortfall liability.

Give them a call on Monday and let us know what they say........ I may be able to give you some pointers.

[Endsmeet]

Thanks Storm for the advice and to everyone else as well.
I really can't believe that this is happening to me now, I have gone thru wks of worry about the IVA proposals and once it was accepted I never, ever thought that I would have this problem concerning my HP agreement.

It really does sound like the companies that deal with IVAs have been taken by surprise as well. What does this mean to people who are a couple of yrs into an IVA and still have outstanding H.P. agreements, will they also get one of these letters?

I take it I have got till the 2nd Sept 07 till anything like door collectors can turn up?
So basically if they won't agree to stopping the termination of agreement and insist on repossessing the car, my only option would be to either hand back the car once they have the court order or find the £1900 to pay them off?
I feel physically sick now, why did I get myself into this mess?

[Adam Davies]

Hi
This does seem a strange one and the first of it,s kind that we have come accross on the forum.
You have a few things on your side
Three very knowledgeable experts[Melanie,Catullus and Storm]the fact that they need a court order[Storm makes an excellent point regarding the fact that they may try and just turn up and see if you will surrender it,I worked for a car finance company many moons ago and this is a ploy that the collections team took as many people were unaware of the one third rule]and the fact that you are not in arrears and want to pay until the end.
I am sure that common sense will prevail otherwise Lloyds are just adding to their bad debt problem for no good reason.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Endsmeet]

Hi Andy,
Again thanks for everyones advice on this matter especially because its Sat, it seems that the creditors can have time off but the rest of us have to worry so thank you again for being available at the weekend.

Again, as I always seem to do at first is panic but now that I've sat back and took it all in it seems that B.H. are exercising their right to terminate the agreement and are maybe treating IVAs the same as Bankruptcy.
If this is the case, I will have to sort out some sort of agreement (parents/I.P.) to pay them the amount owing to keep the car and get them off my back so to speak.
If it is just a standard letter to scare/inform me or whatever but they will accept my continued payments I will find out on Monday morning.
Hopefully they just want me to contact them and to confirm that my payments are not in danger of failing because of my IVA and that I can continue as per agreement and settle in full,there is only 19 months left as well...fingers crossed
As you say, hopefully common sense will prevail and that they will realise that it is in their best interests to continue with the agreement.
But I will have to watch that they don't try and impose any new conditions on me and I won't accept anything on Monday till I talk to my I.P.

As I mentioned before, if the H.P. companies are starting to take this stance as Storm mentioned, how will it effect others who are well into their IVAs or even worse, some who are just leading up to their creditors meetings?

[Storm]

Three HP lenders that have indicated they will review each case with a view to vehicle recovery - Santander, Blackhorse and GE Woodchester.

Each reports the number of failing IVA's as a problem and want to simply cut there losses and go for a shortfall recovery once the vehicle is sold.

Blackhorse unfortuately are known for there knee jerk reactions to situations.

[MelanieGiles]

Just to pick upon Storm's point about the number of IVA's failing. Now I wonder why that might be? Unrealistic creditor hurdle rates, limits on expenditure, inflexible IPs and a bankruptcy regime which continues to look more appealing to persons without assets. What a shame that this excellent method of debt repayment is under such attack at the moment.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk