You and the Law – 21st April 2009

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While working as a self-employed bookkeeper I stupidly signed to act as guarantor for a car the firm was leasing.

The car was stolen and never recovered. By this time the firm had ceased trading and reopened under the name of the owner’s wife, and the insurers offered a payment to this firm on condition that all outstanding finance was cleared first.

They just took the money, and I am now being pursued for the debt.  Shouldn’t the insurance company have checked to make sure the debt was paid off before writing a cheque? LC

It’s not at all clear why the insurers paid out to the new firm, which presumably wasn’t a party to the finance agreement.

Perhaps the vehicle wasn’t leased at all, but purchased through a personal loan which you guaranteed?

If that was the case you could pursue the wife, or whoever took out the loan, for any money you have to pay the finance company.

If the vehicle was leased the insurers should have paid out to the liquidators of the original firm. You may have a case against the insurers, but to get to the bottom of this you should see a solicitor.

Point of interest 

Four years ago I was involved in a car accident in which I was the innocent party.

In December I was awarded £10,000 for injuries and other damages, and a cheque for £1,000 has been sent to me with the balance to come from the courts.

Am I entitled to interest on the £10,000 from the date of the accident? TM

You are entitled to interest on your financial losses from the date of the accident to the date of settlement, and interest on your injury award from the date of service of court proceedings to the date of settlement.

This money is included in the settlement, and so the £10,000 includes interest. If the court is slow in paying out the balance of £9,000 you may be entitled to additional interest.

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