Evans v Finance-U-Limited — bills of sale and bankruptcy

The recent case of Evans v Finance-U-Limited confirms that the holder of security by way of a bill of sale can enforce its security in respect of lending regulated by the Consumer Credit Act 1974 (CCA) where the customer is declared bankrupt, provided that the requirements of the bill of sale have been complied with.

Mr and Mrs Evans bought a car with finance provided by Finance-U-Limited (FUL) under a loan agreement regulated by the CCA. They were jointly and severally liable. FUL could demand early repayment upon certain events happening. A bill of sale had also been entered into, giving FUL security over the car.

Mr Evans was made bankrupt. Mrs Evans continued to make payments. FUL was entitled to call in the loan and enforce its security. It did not do this but submitted a proof in Mr Evans’ bankruptcy. Mr Evans was discharged from bankruptcy. Mrs Evans was subsequently declared bankrupt…

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