car/van finance in arrears options?

So myself and my partner purchased finance for a van in 2007 which my mam went guarantor for, the total finance price was 16500.00.

The repayments were 368.00 over 61 months which came up at 22448.00 in total.

My partner became unemployed so we were unable to keep up with
payments. When we contacted the finance company they told us the finance was not in my partners name but in my mothers name, so it was tricky to contact them.
They passed on the debt to a collection agency.

After two years i finally got talking to them myself and she confirmed that there is a total outstanding balance of 12632.52. she explained that we could give up the van and pay the total that was left she said it would be around 8000.00 150 for 60 months or we could keep the van and pay 350 for 3 years.

Now i would mind keeping the van if i could pay less then 350 a month so i need opinions on this is it possible?

also if it went to court would the judge allow us to pay back just the remaining finance as in just the 16500.00 that was borrowed?

Any help greatly appreciated!!

What type of finance agreement did you enter into ?(eg hire purchase,loan or commercial lease).

It was a higher purchase agreement, i had sent them a letter stating i wanted to give the van back under the half rule, but would rather keep it if i have to pay 8000 anyway.

Information about the half rule here:
http://www.nca.ie/nca/car-finance-debt#half-rule

As per the link,you might be best to return the car under the half rule.
When the debt collection agency said that you would still owe 8,000 after you surrender the van,this was not under the half rule surely?

The half rule does not apply to businesses or HP taken for business purposes.

The problem here is the loan was supposed to be paid in June 2012 so we owe all the arrears.
I wanted to know if it went court would the judge do anything about the original amount which was 16500.00 so that would leave us only owing around 5000?

The problem is if they go to court they will look for €8000 which is a circuit court case.

You would have to defend against that to get the amount owed down to 5000. You would need to engage a barrister to fight the matter at your expense.

Thanks for the reply,i was just on the phone to them and they sounded like they don't want to go trough the courts and to make a proposal by the end of the week.
Would this mean let them no how much i am willing to pay a month to keep the van?