Bills Of Sale & Repossession of Goods
Bill Of Sales and Repossession of Goods
There are a number of companies operating on the basis of loans secured on property, for example cars. These loans are often provided for relatively small amounts of money, with very high rates of APR (often, over 100, and cases of APR’s over 200% are not uncommon).
In many cases, the results of even minor infractions of the rules on these agreements are severe; resulting in the repossession of the goods, and charges that can often amount to hundreds of pounds, while the debtor remains liable for more than the original cost of the loan.
However, in almost all cases due to technical mistakes by the creditor, the securities offered by these agreements are null and void even if the underlying debt is not.
What is a bill of sale?
The definition is so broad that it includes any security on private goods (other than a house or land), but do not include any agreement where the goods automatically pass to the lender.
But a bill of sale is not a pawnbroking agreement, where the debtor parts from possession of the goods, and redeems them at the end of the contract, or a “sale and buyback” scheme, where the customer sells the goods to the creditor (who then owns them, and gains possession of them), with the “debtor” having an option to purchase the goods back after a period of time), or a hire purchase scheme.
For the formal definition look up Legislation&title=bills+o f+sale&Year=1878&searchEn acted=0&extentMatchOnly=0 &confersPower=0&blanketAm endment=0&sortAlpha=0&TYP E=QS&PageNumber=1&NavFrom =0&parentActiveTextDocId= 1054646&ActiveTextDocId=1 054652&filesize=4315
The statutory requirements for a bill of sale to be valid.
1. The bill of sale must be in the correct form and contain the prescribed information contained in the 1882 act.
2. The bill of sale must be registered.
If either requirement is not met, the bill of sale is void (that is, the security will not be enforceable, although the underlying debt may be).
Form and Content of a Bill of Sale.
The language for some of the wording is is archaic, which most ordinary people today wouldn’t understand. Nevertheless, if not in the prescribed form, it renders the bill of sale void.
It will be rendered void if it does not contain:
- The date of the bill
- The names and address of the parties
- A statement of Consideration
- An acknowledgement of the receipt of the advance
- An assignment by way of security of particular goods, capable of description
- Statements of the sum secured, the rate of interest, and the instalments by which repayments are made,
- Agreed terms for the maintenance of security
- A clause limiting the grounds of seizure to one of the following:
- Default with the repayments or any covenant of the bill
- Bankruptcy or seizure of the goods for rent, rates, or taxes.
- If the granter fraudulently removes goods, or arranges for their removal
- If execution has been levied against the goods
- A schedule containing a description of the chattels
- Execution (signature) by the granter (borrower)
- A statement in the form of the 1882 act
- Attestation by a witness not a party to the bill
The consideration is the amount the borrower receives for the bill of sale; NOT the sum secured by the bill (which would include interest and costs). For example, if the agreement is regulated by a consumer credit agreement, it would have to use the amount that was advanced to the borrower BEFORE charges, costs and interest.
The bill of sale must contain a statement in the form provided by the act. Here is the wording: Legislation&title=bills+o f+sale&Year=1882&searchEn acted=0&extentMatchOnly=0 &confersPower=0&blanketAm endment=0&sortAlpha=0&TYP E=QS&PageNumber=1&NavFrom =0&parentActiveTextDocId= 1055715&ActiveTextDocId=1 055738&filesize=2273 . This is often missing.
If a credit agreement regulated by the consumer credit act is secured on a bill of sale, and the bill of sale is void, the credit agreement may also void by virtue of the act, although the law on this is VERY unclear. I would recommend getting into contact with the national debt line on this issue.
So. You’ve got a copy of the bill of sale, and it is a rare bill of sale that complies in all respect with the acts.
Can it be enforced?
A bill of sale can only be enforced if it was properly registered. Since this is an expensive and difficult process, it is rare that this actually happens. However, failure to register the bill of sale renders it void, and so renders any security on goods void.
Consequently, before allowing any creditor to gain possession of your goods, ask to see a registered copy of the bill showing the supreme courts seal.
You can also call the national debt line, and ask them how to search the registry yourself.
Requirements of the Consumer Credit Act
Most bills of sales are also regulated by the consumer credit act. Such a security will be no more valid than the consumer credit agreement. The requirements of the consumer credit act include:
- A description of the security should be included/embodied in the credit agreement
- The bills of sale must be presented to the debtor at the time the credit agreement was signed
- The creditor will normally have to issue a default notice before calling in the debt.
- The terms of the bills of sale must be consistent with the credit agreement.
- The agreement must not be extortionate ( if made before 2007) or constitute an unfair relationship(after 2007)
All the other, normal requirements of the consumer credit act apply. It is also possible to apply for a time order to prevent the repossession of goods under the consumer credit act 1974.
Enforcement of Bills of Sale
Before you are required to give up your property, they must (if you ask for it) provide a valid bill of sale exists, that bears the stamp of the Supreme Court.
However, repossession does not need to be carried out by a certified or professional “enforcement officer” given this, the professional conduct of those actually repossessing goods is of serious question, AND I ADVISE ANYBODY when presented by a bill of sale to call the police immediately, informing them that you are afraid of a breach of the peace and asking for their attendance.