Your rights regarding repossessions

You missed a few repayments and suddenly there are two serious looking dudes on your doorstep ready to take all your stuff away. Can they do that? What are your rights when it comes to repossessions?

The paperwork

When you sign up for a loan or to buy goods on credit, the contract may include an agreement that some of your property is being used as security for the money you owe. The contract must describe the actual property. A statement like “all personal property” is not clear enough and does not give the creditor the right to take everything you own. If you stop making payments, the creditor can only take property which is clearly described on the contract

Before they can take anything

Your creditor, the person you owe money to, has to send you a pre-possession notice 15 days before they can take anything away. The notice has to explain that you are in default (that you haven’t made your payments) and say how much you need to pay back. However, if the creditor has reasonable grounds for believing you might damage, destroy or remove the goods, they can repossess the goods without notice.

Taking property away

If you don’t pay within 15 days they can take away your goods, even if you aren’t at home. The creditor will usually send a repossession agent. The agent can come between 6am and 9pm Monday to Saturday, but not Sundays or public holidays. The agent must have your written consent to come outside those times.

If you are at home the agent must give you a copy of the pre-possession notice, and written authorisation from the creditor. You can stop them from taking the goods away if you pay what you owe plus the repossession costs.

If you aren’t home, then the agent has to leave the same information as well as a notice saying the house has been entered and a list of what goods were taken. They mustn’t leave the house obviously open.

After the goods have gone

After the goods have gone, the creditor has 21 days to send a post-possession notice which includes the date of repossession, repossession costs, how much you need to pay to get the goods back, the current value of the goods and what they will do if you don’t pay.

You have 15 days from the date that the notice was sent to either pay what you owe so far plus repossession costs, or pay back the whole loan, or find a cash buyer or a buyer who will take over the agreement.

Selling your goods

If you don’t do this, the creditor can sell the goods by auction, tender or private sale. The creditor has to try to get the best price and you can get an independent valuation beforehand. If they sell it by auction or tender, then you have the right to bid on the goods.

After the sale the creditor must send you a notice explaining how much the goods sold for, and how much you still owe for the goods including the costs of the sale. If the goods sold for less than you owe, which they almost always do, you will have to pay the extra amount. But you don’t have to pay any more than the amount shown on this notice. Creditors can not keep adding on interest, penalty interest or other costs.

If you are experiencing financial difficultly, get advice as soon as you can. Call 0508 BUDGETLINE (0508 283 438) to find your nearest budget advice service or to speak directly to a budget adviser.

For free, independent legal advice about your credit contract visit your local Community Law Centre. [links] For more information about your consumer rights, visit our website or your local Citizen’s Advice Bureau.