■to recover the possession of any goods or land;
■to regard rights conferred on the debtor by agreement
as terminated, restricted or deferred;
■to enforce any security.
The default notice must explain to the debtor the
nature of his alleged breach, what he must do to put it
right and by when, or, if the breach cannot be remedied,
what must be paid by way of compensation.
notice or in the course of an action by the creditor to
enforce a regulated agreement. The court can allow the
debtor time to remedy a breach or, where the breach
consists of non-payment, time in which to pay the
arrears. In the case of an HP or conditional sale agree-
ment, the court may rearrange the pattern of future
instalments. A debtor can also apply for a time order
after receiving a sums in arrears notice. In this case the
debtor or hirer can make an application for a time order
only if he has given notice to the creditor or owner and
a period of 14 days has passed since he gave notice. The
debtor must indicate that he wants to make a proposal
in relation to making payments under the agreement
and provide details of his proposal.Information sheets (s 86A)The 2006 Act creates a new s 86A which requires the
OFT to prepare and publish information sheets for
debtors and hirers about arrears and default. The infor-
mation sheet must be given to a debtor or hirer at the
same time as a notice of sums in arrears or at the same
time as a default notice. The information sheets are
designed to help the debtor and contain, for example,
information about debt management options and con-
tact details for providers of advice.Repossession of the goods (ss 90–92)One of the attractions of HP to Victorian traders was
that, if the hirer defaulted at any stage, the owner could
recover the goods. Many HP agreements even gave cred-
itors the right to enter the hirer’s home for this purpose.
Debtors under regulated HP and conditional sale
agreements now enjoy protection against the so-called
‘snatch back’:■A creditor must obtain a court order before he enters
any premises to repossess goods.
■If the debtor has paid at least one-third of the total
price and he has not terminated the agreement, the
goods are protected. The creditor cannot recover pos-
session of protected goods unless he obtains a court
order. If a creditor ignores this requirement, he faces
severe penalties. The agreement terminates immedi-
ately; the debtor is released from all liabilities under
the agreement and, in addition, can recover money
already paid.Part 3Business transactions
398
Woodchester Lease Management
Services Ltdv Swain & Co(1999)
The defendants, a firm of solicitors, had entered into an
agreement with the claimants for the hire of a photo-
copier. Payments were made regularly by the defendants
for more than two years when they suddenly stopped.
The claimants sent a default notice to the defendants,
but a mistake was made in calculating the amount which
should be paid to remedy the default, with the result that
the amount was overstated by more than £240. The
Court of Appeal held that the default notice must spe-
cify accurately the sum of money to be paid to remedy the
default. Although a court might be prepared to overlook
a minor discrepancy, the overstatement in this case was
substantial. The notice was, therefore, invalid.The time allowed for the debtor to remedy the breach
must be at least seven days from the service of the default
notice. It must contain certain information about the
consequences of failing to comply with the notice.
If the debtor carries out the requirements of the
notice, the breach is treated as if it had never happened.
Where the notice is not heeded, the creditor may pursue
any remedies contained in the agreement, subject to the
provisions of the Act. At this point the debtor may seek
the help of the court by applying for a time order.
Under changes introduced by the 2006 Act, creditors
must give debtors or hirers notices of sums in arrears
within 14 days after a default event has occurred and at
six-month intervals thereafter. Failure to serve a sums in
arrears notice prevents the creditor from enforcing the
agreement during the period of non-compliance and the
debtor is not liable to pay interest.
Time orders (ss 129 –130)
A debtor may apply to the court for a time order where
he has been served with either a default or a non-default