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Dealing With Debt Created by Unauthorized Transactions

by on November 16, 2012

in FAQs

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We are not talking about unauthorized credit cards, but transactions like auto repairs that are completed without your approval. When a married couple purchases a car, one person may put the vehicle loan in his or her name, even if the partner will be the main driver.

The car may be registered in the name of the loan holder, making that person the legal owner of the vehicle even if the other spouse is driving it. If the main driver authorizes repairs on the car but does not pay the bill, the other spouse may find him or herself with unpaid vehicle-related debt.

A vehicle repair shop is authorized to keep the car in lieu of receiving payment for the repairs. If the customer does not pay the bill, the mechanic can sell the car and keep the money owed for repairs. Alternatively, the mechanic could initiate a county court claim against the customer for the cost of repairs plus interest.

If the court approves the claim, it will issue a summons. If the customer does not respond to the summons, the mechanic will receive a judgment in default and may initiate enforcement procedures such as bailiffs.

Legal experts recommend that a mechanic in this situation send written notice to the customer, using recorded delivery, stating the action that will be taken if the bill is not paid in full within seven days. But, which spouse will be on the receiving end of this correspondence and additional proceedings that may follow? The individual in whose name the vehicle is registered, according to the Vehicle Registration Certificate.

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The Driver and Vehicle Licensing Agency issues vehicle registrations and maintains a list of registered keepers. Though a registered keeper can be different from the legal owner, if the name of the loan holder is listed on the Vehicle Registration Certificate, then this person will be held accountable for related debts. New cars are typically registered by the dealer at time of purchase, while car buyers must register used vehicles themselves.

The vehicle registration process involves completing an application and providing identity documents. If the car loan holder lists his or her name as the registered keeper, this individual will be listed on the Vehicle Registration Certificate. The car repair shop can pursue the listed individual for payment of bills related to vehicle repairs.

If the individual cannot get the money from the spouse who authorized the repairs and is unable to repay the bill, there are alternatives. The cost for repairs may be eligible for inclusion in a debt management plan and repaid over time, subject to agreement of the repair shop. Debt management plans are just one of several ways to handle unsecured debts accrued in the UK.

The registered vehicle owner should carefully read the agreement that the spouse signed with the car repair shop when authorizing the fix. This should detail what recourse the shop has regarding unpaid repair bills. After informing the repair shop about the vehicle ownership situation, the next call should be to a debt expert for help with repayment. This professional will provide recommendations and assistance throughout the debt repayment process.


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