What do you think I should do??

[adam090376]

Dear All
I have a question that is a bit tricky and really need some advice. I have submitted my paperwork to Thomas Charles for an IVA and they are looking through the paperwork before I guess submitting it to an IP to draw up a proposal but they have rang me today with what could be a problem.

The problem is that I took out a loan called a logbook loan which is a loan secured against my car. The loan company keep the logbook until I have paid back the money owed. I pay the money every week until it is complete and then get my log book back. When I first put this to Thomas Charles it was put down as an expense under HP agreements and these extra payments would go into the IVA once it was complete.

However the people at Thomas Charles are now saying it is a loan and should be included in the debtors. I am really worried about doing this because I can not afford to lose the car I need it for work as public transport is rubbish here.

What do you think I should do?? I am a bag of nerves about losing the car. I have so many questions going around my head at the moment and would love to have some advice/answers.

[MelanieGiles]

Hi adam

A "logbook" loan does not give valid security over the vehicle, and is only relevant if you decide to sell the vehicle which I assume you are not. Thomas Charles are right to treat this as an unsecured loan, and depending upon who they refer you to, your IP will be able to discuss this with you specifically.

If Storm is around tonight he may be able to give us more information on these increasingly popular loans.

Please don't worry about the loan company coming for your car. Legally they have no rights over it.


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

[Storm]

It will depend on the terms of the loan - if the loan is secured against the vehicle (some are) then it is treated like Hire Purchase /secured. In that title to the vehicle (ownership) has transfered for the term of the loan and you only become the vehicles legal owner again when the final payment is made.

Check the paperwork - I trust Thomas Charles have done this to assertain if the vehicle is being used as security.

If not then they are right to treat it as unsecured.

These loans can have very very interest rates as I am sure you will know !! - 300% + APR is not unusual.

Re Melanies comments - one or two of these companies are actually completing a form of sale and rent back agreement which in essence means legal title does transfer for the period of the loan.

[adam090376]

Dear Melanie and Storm
Thank you for your reply's.
Just to confirm that the the log book loan people have the log book and will keep it till the loan is paid off. The loan company have said that the vechile is used as security to make sure they get their money back should I not pay them. I have no intention of selling the car as it is needed for work. I wonder if Melanie could just clarify what she means by the loan company have no legal rights over it? Also a question for Storm the terms of the loan are that I have given them the logbook to the company and they have said they will keep it till the loan is complete so I guess you could say they have my logbook but they have not transferreed the details to their ownership they just have the logbook so whwere does this leave me?
Whilst I am here I would just like to say what a wonderful site this is, I havent been a regular poster but log on everyday to read peoples progress and problems and now that I seem to be moving with my IVA I will keep you posted with news. A big thank you to all of you as you really hepled me decide that an IVA was right for me and got my head out of the sand.

[adam090376]

Hello All
Just to let you know my paperwork has now been passed from Thomas Charles to a company called Accuma in Manchester I have heard the name on this forum just wanted to know if anyone had any good/bad feedback on this company? I havent heard from them yet but they have only had my paperwork since Friday 11th so I guess I should get a call from them soon. Main reason for post is that I was wondering what Melanie and the other experts think will happen with this log book loan have you ever had them in an IVA? Thomas Charles have advised me to carry on paying it unitl Accuma get in touch. But just trying to work out what will happen with this expense so I can plan what I may need to pay for next 5 years. Good luck to anyone waiting for meeting results hope all goes well for you.