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
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
creditors 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.