Procedures for Repossession - Hire Purchase Act 1967

Law of Hire Purchase

REPOSSESSION

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CHOOSE THE RIGHT PROCEDURES

REMINDER!!!if you fail, you will be sent to the beginning!!!

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Hang Liang Bank

After checking through the system, it found that the amount of total instalment is 65% of the total cash price

Exercise the right of repossession

Obtain an order from the court

What should I do???

Scenario

Jackson bought a car under a hire-purchase agreement with Hang Liang Bank Bhd.Due to some reason, Jackson defaulted in his monthly instalments for the last 2 successtive months.

Subtitle

Me as Jackson

Me as Hang Liang Bank

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Please try again. Read properly the right procedures for repossession

EXCELLENT!

According to Section 16 (1) of the Hire Purchase Act 1967:

• at least 2 successive defaults in payment of the monthly instalments
• the amount of the total payments of the monthly instalments must less than 75% of the total cash price

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At least 21 days before repossession is carried out, Hang Liang Bank Bhd must serve a document to Jackson.

Choose the right document!

WRIT OF SUMMON

STATEMENT OF CLAIM

4TH SCHEDULE NOTICE

WELL DONE!

Based on the case of Pang Brothers Motors Sdn Bhd v. Lee Aik Seng [1978] 1 MLJ 179 : the court held that repossession done before the expiration of 21 days of the 4th Schedule Notice renders it void.

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In the case of United Manufacturing Sdn Bhd v. Sulaiman Ahmad & Anor [1989] 1 MLJ 482 : the court held that repossession can be done at any time after 21 days of the 4th Schedule Notice expires. the owner also is not bound to repossess immediately after the expiry of 21 days.

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who should be appointed?

Repossession

Upon the expiry of the 21 days and failure of Jackson to pay the defaults, Hang Liang Bank can exercise the right of repossession. Who should be appointed to undertake the repossession?

AGENT

BANK'S STAFF

REQUIREMENTS OF AN AGENT

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Rules & Regulations of Repossession

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Hang Liang Bank

After all procedures have been observed, the repossession has taken place by the bank's agent. The car is sent to the bank's garage.

What should the bank do now?

restructuring hire purchase

selling off the car

serve 5th schedule notice

5th Schedule Notice

Section 16(3) requires the owner, within 21 days after repossession of the goods, to serve on the hirer and every guarantor a written notice in the form set out in the 5th Schedule

This notice gives options to the hirer either:

OPTION 1

OPTION 2

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the 21 days has come to an end

Jackson chooses to ignore the notice until the end of 21 days. Hang Liang Bank Bhd intends to sell off the repossessed car. There are two options available.

by public auction

other than by public auction

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If the proceeds from the sale are inadequate to pay the outstanding amount due, the owner will recover the shortfall from the hirer.The hirer will also need to bear the auction expenses.

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CONGRATULATIONS!

You just complied all the procedures of repossession, from the beginning until the selling off the repossessed goods.

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Me as Mr Jackson

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After the end of 21 days of the 4th Schedule Notice, Hang Liang Bank Bhd exercises its right to repossess your car.

What should I do now?

Wait for the bank to serve the 5th Schedule Notice

Return the car to the bank

Pay the arrears and get back the car

If you choose to resume possession of the car, how many days do you have to exercise the right to redeliver the goods?

14 days

21 days

30 days

EXCELLENT!

According to Section 16 (3) of the Hire Purchase Act 1967, the owner is required to serve on the hirer a written notice set out in 5th Schedule Notice and gives option to the hirer either:

• to resume possession of the goods
• to terminate the hire purchase agreement

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According to Section 19 of the Hire Purchase Act 1967, the right to re-deliver the goods is only available if the hirer, within 21 days after receiving the 5th Schedule Notice:

• Pays to the owner the amount due under the agreement up to the date of payment;
• remedies any breach of the agreement as requested; and
• pays to the owner the reasonable costs and expenses he incurred in repossessing the goods and redelivering it to the hirer

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YES, YOU DID IT!

After complying all the requirements and paying all the costs, you now can resume possession of the car.

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