Keep your car

It can be hard to keep up with repayments when something unexpected happens like you lose your job, or you become ill or injured and can’t work.

When something unexpected happens you have the right to apply to the creditor for relief under the hardship provisions of the Credit Contracts and Consumer Finance Act. This means you can ask to reduce your payments or take a payment holiday.

Remember, reducing your payments or taking a payment holiday will mean that you end up paying more over the long term, and it will take you longer to pay off your loan.

You can only ask for hardship provisions if you are up-to-date on your payments, so you need to act quickly. Also you can only apply for the hardship provisions if the loan is for personal or household use. So if the car was bought for business use it won’t be covered.

If you took out payment insurance when you got the loan then that may cover your situation. Check the terms and conditions in your insurance policy.

If you are having trouble with your payments, but you don’t qualify for the hardship provisions you can still:

• talk to the finance company about reducing your payments or taking a payment holiday
• get advice from a budget advice service
• if things are really tough, find out more about a summary instalment order, no-asset procedure or bankruptcy from the Insolvency and Trustee Service [link] or 0508 467 658.

Keeping your car might not be the best for your situation, so look at all your options. Consider returning the vehicle to the finance company. You can ask them if this is possible. It will save you the cost of having it repossessed. You will still owe money but the debt won’t include extra penalty interest and repossession costs.

For advice about your options call 0508 BUDGETLINE (0508 283 438) to find your nearest budget advice service or to speak directly to a budget adviser. You can find out more about how to keep your car at Keep your car, by knowing your rights, [link] or your local Citizens Advice Bureau.