Payday Loan Business for SalePayment day loan business for sale
It is a contingent sale contract under which the debtor can use the goods that have been resold, as opposed to pledges or mortgages where the creditor would take ownership of the goods. Accommodation companies use letters of sale to ensure the funding of their furnishings, and individual or non-registered companies can use them to record a general transfer of their accounting debt.
Created and popularized centuries ago, when the Viktorian mid classes were looking for a means to obtain money based on non-country securities, letters of sale used to be a commonly used means of securing money provided by individual persons and merchants. The use of purchase letters has increased significantly in recent years, particularly for financing against the safety of a car (commonly known as a "logbook loan").
In 2001, 2,840 purchase contracts were recorded, which increased to 52,483 in 2014. 47,723 of this amount related to logistics logbooks. Even though the general assignment of the claims of a natural person or an unregistered company must be recorded as a contract of sale, there were only 97 such applications in the same year.
In view of the exposure to expansion in this area, this contribution is concentrated on log book credits. Every drivable car taken into consideration! Wellcome to the log book lending industry. What is the function of log book credits? Log book credits allow a borrower to take out a loan that is usually secure against a car they already own (although it can also be used to fund the purchasing of a car without the protective measures of a hire-purchase contract or a PCP).
Put in simple terms, there are fears that the Bills of Sale Acts' wording and practice are outdated and unwieldy and that individuals will not comprehend them. Languages of laws are ancient and the procedures for registering and enforcing them necessary for the creation of safety are costly and no longer appropriate.
Often the cost of these requests is transferred to the borrower, and unlike the £15 ceiling that would be applied to a payday loan, there is no such ceiling for log book credits. The contract of sale must meet a 12 different conditions listing in a standardised format as defined in the Bills of Sale Act 1882, which must be attested and followed by a declaration (which must later be confirmed by an affidavit) from the witnesses that the contract of sale has been duly executed.
In the event of non-compliance with these conditions, the creditor shall lose the right to bring an action for reimbursement against the debtor. Unsatisfactory documentation issues with purchase letters have prompted many creditors to use the outdated standardised forms, which can be a source of confusion for creditors. The purchase notes must indicate the precise amount repayable and breakdown the amounts due.
Another question therefore comes up, for example, in the context of Revolving Loan Facility schemes backed by a general transfer of debt - it is just not possible to say with confidence how much the loan amount or repayment will be. Therefore, these creditors are prohibited from using their goods as collateral for credits.
Purchase agreements must be recorded with the High Court to enable prospective buyers of the relevant assets to verify that they are collateral relevant. There is a 25 pound safety purchase contract sign-up charge, but the extra costs of the witness's sworn statement to a lawyer may be in excess of this amount.
Purchase contracts must be recorded within seven workingdays of their signature. Often this period is neglected, resulting in an extra £50 legal surcharge. Registrations must be repeated every five years to ensure continued creditor protections. Costs for the recording of a sales contract in connection with a general transfer of debt are much higher and range from £480 to £1,735.
There seems to be a consensus in the sector that the Registry itself is not user-friendly. The purchase contract is recorded with the name and zip code of the debtor, not with the property - and therefore it is hard (or even not possible, if all you have are the registration number details) to browse the registry.
There is a charge of 45 for searching the registry for a car. It may not be surprising that the High Court has affirmed that research is rare in the field. Delay in the repayment of log book credits shall entitle the Creditor to take measures to secure the relevant car. After the delay, a creditor may file a notification of delay and must then await 14 calendar days before commencing execution (typically with the confiscation of the vehicle).
A lot of creditors use execution agencies to take possession of the car again, which can be a trauma for everyone involved. Loan provider must await five workingdays prior to the sale of the car, during which waiting periods the debtor can request a decision from the courts to prevent the sale. But anyone with previous knowledge of the judicial system will understand that five consecutive working day is an inadequate amount of work.
Suppose the car is then resold, the debtor remains responsible (and may be sued) to the creditor for any underfunding of the log book credit, plus fees and expenses. Laws do not allow the debtor to hand over the car to the creditor for full and full repayment of the loan if he is not able to pay it back.
In the event that the Mortgagor has sold the Loan Object to an unconscious third person (who has either not looked in the Registry or looked and has not found the corresponding sales contract) and then does not continue to repay the Loan Object, the Mortgagor may confiscate the Loan Object from the third person. Unattractive legal redress for the third person includes the repayment of the driver's log or the purchase of the car from the driver's log rental company at a rebate.
This concern, combined with the booming log book credit market, prompted the Treasury Department to commission the Law Commission to review purchase agreements, leading to the Consultation Paper and various proposed reforms. Law Commission is recommending a revision of the Bill of Sale Acts. It proposes the creation of the concepts of "goods mortgage" (which would generally cover a right of lien on movable property ) and, in the particular case of a goods mortgag in respect of a car, "vehicle mortgage".
Non-compliance with these conditions would mean that creditors would loose all right to the collateralised asset (both vis-à-vis the borrowers and vis-à-vis third parties), but they would continue to be eligible for reimbursement of the loan (i.e. they would loose their collateral). It is proposed, for example, that the deed of sale (i.e. the
must be in simple, up-to-date English and, in the case of a loan from a log book or a car loan, must make it clear to the debtor that the creditor would own the car until the loan was fully reimbursed and could take possession of the car again if the payment were not made; the creditor must also make it clear to the debtor that the car would be owned by the creditor until the loan had been fully reimbursed and that the car could be repossessed if the payment were not made;
There is no longer a need to establish a firm amount to be reimbursed or the installment plan that would provide better financing accessibility for unregistered companies and private persons in relation to credit lines, bank loans and revolving guarantee schemes; and testimony must continue but does not need an oath from the witnesses.
As regards log book credits, the obligation to enter the car loan in the High Court would be superseded by an obligation to enter the car loan in a named assets financing registration, as is the case for lease contracts (and aircraft). The proposal is that non-registration would mean that the creditor would not be able to assert the car loan against a third buyer but would still be able to assert against a borrowing company.
Obviously, if the debtor disappears after he has resold the car to a bona fide buyer, the creditor would remain with little recourse. However, if the creditor were to sell the car to a bona fide buyer, the creditor would be obliged to pay the full amount. With regard to other commercial property where there is no record of assets (e.g. wines and art), the obligation to be registered with the High Court will be maintained, but the procedure will be streamlined (including electronically submitting and finding by e-mail and waiving the request for an affidavit).
How exactly the simplified storage system would work is not yet clear, although there may still be issues if, for example, there is no central registry and if the address and name of persons are needed for a research. Protecting borrowers: For log book and other managed credits, another suggestion is to oblige the creditor to obtain a judicial order enabling the creditor to obtain his purchase agreement after the creditor has paid back at least one third of the loan (including interest and handling charges).
Some log book renters have opposed this, quoting the charges and delays in getting a judicial order. Commenting on the charges, the Law Commission argues that the £155 litigation charge (which has been independently discussed and is to be increased to 255) could be transferred to the borrower if the borrower is a success (although it should be noted that this would not cover the lender's litigation costs), but argues that these charges would be compensated for by the waiver of the general obligation to record all such lending with the High Courts.
Optional termination: Another suggestion is that without any real chance of repayment of the loan, the borrower could hand over the goods to the creditor at any moment and in any state ( except in the event of wilful deterioration or serious negligence) in full and full payment of their loan. That right would be relinquished from the moment the creditor begins to bear the cost of taking back the property.
Protecting individual purchasers: creditors of commodity liens would not be able to reclaim the goods from third parties (other than commercial or financial purchasers) unless the creditor could demonstrate that the buyer was acting in bad faith or took note of the commodity lien. Suggestions to increase the use of car checks: The Commission on Legislation came to the conclusion that it is not feasible to require retail buyers to perform car origin and registration tests, but recommended that, as these become less expensive and better known, it could become a condition for a retail buyer to check with a register in order to obtain redress when purchasing a car.
There is a mix of rules, and while some creditors, such as the deletion of judicial registrations and related fees, naturally place the emphasis on improving the protection of consumer and third parties.