Useless son dug a deep hole and cannot get out! Do I bail him?

Great idea looked at from another angle.

He owes about £13k but the settlement yesterday would have been £10650. so assuming he gets the top dollar for the car £8. I'd need to lend him £2600 +£1000 for an old banger and I guess let him sort out the CC and overdraft himself. Without the car and insurance he would have £600pm clear. So you reckon that's the way to go?

Thanks for that.

That's an interesting option. So if the car was £8k and he has paid off around 4 payments he could get away with paying 50% of the original price rather than 50% of the total amount owing, or 50% of the early settlement amount?

He will tear the CC up and is only a couple of hundred pounds over his draft and right up to his CC limit, I think he will be able to manage the debt for these on his own once he gets rid of the crippling car payments.

To the other replies, thanks guys and yes I feel he will be learning a hard lesson after this (despite being told it would happened before it did) and I can keep a tight reign on his recovery as he lives with me. I feel just a little help here will go a long way. If it happens again he is on his own.

Thanks.

Been in touch with Blackhorse Finance today and apparently it's not classed as a car loan even though it is a car loan, its a scheme 8 HP agreement, which means there is no voluntary termination allowed!

They suggested maybe selling the car for whatever privately (say £6k) giving them the 6k and using this to pay in advance the £238pm for around 2 years, in the meantime also continue to pay £100pm on top for the same period and at the end of the 2 years this will be another

This of course means he has no car and is still paying the original interest, over the original term (58 months - 3 months)

Sound like the best way?

Thanks.

they do I guess. It just gives him some breathing space.

This way he could sell the car for £6k to £8k and realise it's worth, and slap that down on the stupid interest he signed up for. Not so sure he'll think it such a good idea once he's a few months into paying for a car he no longer has, but that's life. He made his bed.

I supposed the ideal would be to pay off whatever he gets for the car and reloan what's left (around £5k) this would save him around £3k in interest, but then there would be interest on the new loan and it's doubtful he would get another loan anyhow!

Yes they have, but that presumes he pays the full amount off now. ie gives them the proceeds of the car plus the difference, which he doesn't have.

Sounded like some corny way off getting around early canceling when she was saying it.

The 8 is an internal scheme.

True.

Good idea.

Yes that was the impression got.

Thank you.

Is he close enough to work to cycle? A 19 year old should manage 5 miles each way easily. It's a lot cheaper and healthier and it'd save insurance and road tax. It'd also give him some time to think about debt as he cycles around.

FoFP

Lol

In message , M Holmes writes

Should his debt cycles be based on 70 year generational k-waves?!

Am I the only one to be reading this thread to think that the Consumer Credit Act comes the the rescue somewhere, or at least helps.

After all, if it is an HP agreement, surely he can just stop hiring and hand the car back to its legal owner, Blackhorse Finance?

What does the agreement say? It must contain something about early repayment?

What if the interest payments are front loaded?

Appears to have just a one page agreement that states

plan=personal loan Scheme no= 08R

Cash price435.00 with charges total= 14963.00

APR 12.3% one payment of £377.18 inc fee. then 58 months @£238.18 followed by final payment of £308.18

Small print on back doesn't mention "termination" anywhere. There are sections covering charges if you break this agreement: and this just goes on about fees for late payments and interest etc.

If you break this agreement. (you must pay in full)

and the "general" which just covers assignment of debt etc.

and at the bottom it states this agreement is covered by the 1974 consumer credit act.

That's it!

They reckon its not a car loan although it was bought from a car dealer for a car.

He didn't get the car HPI

Means he just carries on paying the full agreement over the full 60 months, but with advance payments.

If he gets rid of the car and insurance he saves £600+pm and this will allow him to live within his means and run the overdraft and CC as normal.

To a certain extent he's a victim of that. At another point of the credit cycle, it wouldn't just be his parents criticising his behaviour (19 year olds are programmed to not just ignore, but defy, parental criticism) but his peers.

At this point though, his reckless behaviour is lost in the noise.

FoFP

If you clear his CC he will probably max it out again pretty soon!

The card has been torn up. I think he will stick to whatever we agree, it's his last chance.

Just been reading the 1974 consumer credit act and it states quite clearly there should be termination notices in the agreement form and this one doesn't have any!

Someone suggested selling the car and giving the money to Black horse as full and final settlement, even though there would still be£3k to £6k outstanding!!

Someone else said let them take it to court as the court will freeze the interest.

Have you (or anyone) got a link to where the act could be read?

I did a search but only found stuff about the act, not the act itself.

Thanks, JB

This is for the non cancelable section of the act

The more I think about this the more I think that this is a legal and not so much a financial matter.

Suggest you post a message in say uk.legal.moderated newsgroup.

In message , Jo writes

I think we need to be careful with our terminology here. Cancelling an agreement is not the same as terminating an agreement. The fact that an HP agreement is not cancellable doesn't mean it can't be terminated.

I'd love the see the agreement, because from the sound of it is simply a personal loan that isn't secured against the vehicle, although Black Horse have been coming up with some odd agreements recently.