With normal credit agreements, the goods are yours straight away and you only owe money to the creditor. But with a hire-purchase or conditional-sale agreement, the goods are not yours until you have paid for the item in full. This is why hire purchase debt must be treated as a priority debt, failure to make payment to the hire purchase debt means that the goods could be seized.
You should be aware if the item is a hire purchase debt when you sign up to the credit agreement. If you are unsure, check the agreement document that you signed.
If the item is on hire purchase then you are not able to sell this item without your creditors’ permission and non-payment of the debt means that the creditors can ask for the goods to be returned to them.
If you have paid less than a third of the total hire purchase debt, the creditor can repossess the item without having to take you to court.
If you have repaid more than a third of the total hire purchase debt, the creditor must go to court to ask for the goods to be repossessed. The court may decide that you do not have to return the goods as long as you agree to make the payments that the court requests.