scots law basic advice from govan law centre

hire purchase goods

Where goods are purchased on ‘hire-purchase’ the consumer does not acquire title to the goods. In other words, the creditor owns the goods while the debtor makes hire purchase instalments. Sections 90 and 91 of the Consumer Credit Act 1974 provides certain protection for consumers who enter into hire purchase agreements. If you default on a hire-purchase agreement it is not unusual for creditors to attempt to repossess or ‘snatch-back’ their goods. At Scots common law, it is arguable that such practice is unlawful without the order of the court (see further Gow, The Law of Hire Purchase in Scotland (2nd edition, 1968 at p.210). Sections 90 and 91 of the 1974 Act provide that where the debtor has paid one third or more of the total price of the goods, the hire-purchase goods become ‘protected goods’ under the 1974 Act. This means that where the creditor is entitled to repossess the goods he/she must raise a court action and obtain the permission of the court. It is important to remember that debtors are entitled to make time orders under section 129 of the Consumer Credit Act 1974. This means you can ask the court to allow you time to pay back the debt. In deciding whether to make a time order, the sheriff must consider whether it is just to do so, taking into account whether the sum offered is reasonable having regard to the means of the debtor. If you want time to pay – you should obtain assistance from a law centre, local firm of solicitors, or money advice agency as soon as possible. Any court action raised to recover hire-purchase goods must be initiated in the sheriff court area where the debtor is domiciled (where you live and regard as your place of home). You cannot be sued, for example, in an English county court, where the creditor’s place of business happens to be. This protection comes from the Civil Jurisdiction and Judgments Act 1982, Schedule 12, Part 2, paragraph 4 (inserting s.141(3A)(a) and (b) to the 1974 Act). It is possible for the debtor to consent to repossession – however, such consent must be genuine and informed.