bank car repossession

piperh

I've just had an interesting conversation with a neighbour and it got me thinking.

If you had a bank car loan 5yrs ago for €20,000 taken out over 3 1/2 yrs and had paid back €23,000 but still owed €3, 000 are they likely to repossess the car if its value is less than the outstanding debt. My take on it is yes but he reckons its unlikely.

unclebill98

Is it a hire purchase?

Normally bank loans are unsecured.

chris85

Depends. If it was car finance then the car is secured on the loan and if just a regular car loan they are usually unsecured.

I will assume car finance. There is the one third rule that if the loan is over one third paid the bank require permission or a court order to repossess the car.

There is also the half rule where if over half of the hire purchase price has been paid then the customer may return the vehicle to the bank with no liability. Account should not be in arrears when returning vehicle and should be in fair condition also.

http://www.nca.ie/index.jsp?p=145&n=305&a=743

piperh

Thanks was just curious as it seems a bit of a strange one to me, his assumption is as the origininal loan amount has been paid its now just interest he's paying they wouldn't bother. Not sure what type of loan he has but he said they told him 2yrs ago they'd got a repossession order and he carried on paying it and then last october when he lost his job he was unable to pay it again, they sent him a letter in March asking how he intended to clear the debt and he's heard nothing since.

The car is trashed, scratches, dents and interior destroyed by kids :eek:

GarIT

piperh wrote: »

his assumption is as the origininal loan amount has been paid its now just interest he's paying

If money is owed the bank are going to want it back regardless of how much is left. He could also go into the bank and talk about spreading out the payments, I think the bank would prefer that over something else.

chris85

piperh wrote: »

Thanks was just curious as it seems a bit of a strange one to me, his assumption is as the origininal loan amount has been paid its now just interest he's paying they wouldn't bother. Not sure what type of loan he has but he said they told him 2yrs ago they'd got a repossession order and he carried on paying it and then last october when he lost his job he was unable to pay it again, they sent him a letter in March asking how he intended to clear the debt and he's heard nothing since.

The car is trashed, scratches, dents and interior destroyed by kids :eek:

Interest is part of it and the bank could go to court and secure a judgment and then take it further if they wish. For €3k it would not be uncommon for this to happen, have seen it for less.

I would imagine they will have a debt collection agency take over the matter and pursue him and if choose not to pay they will take court action on behalf of the bank, this is generally how it goes.