Step 3 Choose your debt solution – Common priority debts 3 Hire purchase or conditional sale debts Why are these a priority? With most credit agreements, you own the goods straightaway. With hire purchase or conditional sale agreements, you do not own the goods until you have paid off the whole amount under the agreement. You cannot sell the goods without your creditor’s permission. Check what type of agreement you have If it is hire purchase or conditional sale, your agreement should clearly say so. This advice only applies to hire purchase or conditional sale agreements that come under the Consumer Credit Act. Your agreement should say if this is the case. If you are not sure what type of agreement you have, contact us for advice. They are a priority debt because creditors can repossess the goods if you miss payments. They can then sell them and use the money to reduce your debt. Your creditor does not need to go to court to take the goods back if you have paid less than a third of the amount payable under the agreement. However, if you have paid at least a third, they will need a court order to ask you to give the goods back. What can I do? If you want to keep the goods, use the Summary budget for creditors to make an affordable offer towards the arrears. Explain to your creditor why it is important that you keep the goods. Do you have a personal contract purchase (PCP) agreement? PCPs are a type of hire purchase agreement and follow the same rules. However, because of the way payments are organised in PCPs your options are usually more limited. If you have a PCP agreement, contact us for advice. Page 67