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CoolConkers
Starting Member
United Kingdom
5 Posts |
 Posted - 25 November 2010 : 21:52:27
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Hi,
I have a question about cars. My partner and I have come to the end of everything we can do to avoid BR. It looks inevitable at this stage. We have no assets other than our cars.
My car is coming up for 3 years old, the trade in price is around £3750. It's a small diesel cost £30 a year for road tax, it's economical (50mpg) and cheap to insure.
My partners car is 5 years old, and worth maybe £2500 trade in. It's a 7-seater, and at weekends we have 5 children to ferry around to places. It is a little thirsty but handy for domestic use.
None of our debts are joint, and existed before we had even met.
Would I definitely have to lose my car? I need it to drive to work, but that is about 7 miles away, but off any public transport route by several miles. I also need to maintain contact with my children who live 40 odd miles away. Using public transport there will cost a small fortune and running the car would be much cheaper in the long run.
My partner isn't working at the moment, but is looking for work and will probably need her car to do the job she is looking into, i.e. community caring. She also needs it for things like dropping the kids off to school etc. The school is 1.5 miles away.
Would any OR assess that we don't need 2 cars? Would the OR even look at the whole domestic picture and determine that we don't need a car each?
Just looking for some pointers while we look into our options. It may be that we decide to jack in one of the cars, but the question is, which one.
Regards
CoolConkers |
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Blackie
forum expert
United Kingdom
565 Posts |
Posted - 26 November 2010 : 07:31:46
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Good Morning CoolConkers
Even although you might be making yourselves bankrupt at the same time, each bankruptcy is individual and separate and therefore you are both subject to the same guidelines regarding vehicles.
If your vehicle is worth under £2500, it is unlikely that the OR will be interested especially if the cars are needed for family, work etc. Any value over £2500 may require some money changing hands. It is normal for the OR to leave you approximately £2000 - £2500 to purchase a new vehicle therefore he may simply require the balance between that sum and the value of the vehicle to be paid in order for the car to remain with you. However it is not an exact science and if it can be proven that you need a large, reliable vehicle then this will be taken into account. It is down to the OR based around the valuation and rule of thumb, as above.
Good luck
John Blackadder |
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CoolConkers
Starting Member
United Kingdom
5 Posts |
Posted - 26 November 2010 : 15:33:32
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If I managed to find the cash to pay off the finance on my car, would that be considered to be giving that creditor preferential treatment over my other creditors?
I had a bit of a windfall from the sale of my home. I was due to pay it into my IVA, but since BR is on the cards it seems a waste of money to pay the IVA. My IPs words, not mine. So I could pay this off, with a little bit of hardship in the next month.
Regards
CoolConkers |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 26 November 2010 : 15:37:06
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quote:
Originally posted by CoolConkers
If I managed to find the cash to pay off the finance on my car, would that be considered to be giving that creditor preferential treatment over my other creditors?
Yes, it would. If you pay more than your normal monthly repayment to one creditor then you would need to do the same to all creditors otherwise it could land you in a bit of trouble with the OR. |
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CoolConkers
Starting Member
United Kingdom
5 Posts |
Posted - 26 November 2010 : 16:29:02
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So my only real option is to cancel the DD for the finance, and let the finance company eventually take the car? If I am falling into arrears in my IVA, but still paying for the car, I'm in effect giving them preferential treatment?
Regards
CoolConkers |
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Blackie
forum expert
United Kingdom
565 Posts |
Posted - 26 November 2010 : 17:07:22
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Hi CoolConkers
I think that we are now slightly confused. Do I take it from your last posting that the cars are on finance and can be repossessed if you fail to keep up payment? If that is the case the main issue is whether you owe more to the finance companies than the car or cars are worth. Please let the forum know about the status of the vehicles.
all the best
John Blackadder
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 26 November 2010 : 22:11:21
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Hi
It is worth first checking what type of finance agreement you have on the cars. HP, Lease, Baloon Payment, Fixed Sum Loan Agreement etc
Please check and come back to the forum. The answer will have a massive bearing upon your next steps.
Also good news that you have spoken to your IP regarding the difficulties as you will eventually need a failure certificate from the IVA company BEFORE you petition for bankruptcy.
This window of no IVA payments will give you the chance to save for the court fees .
Look forward to hearing about the car situation
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
08454 751 851
Real People ..... Real Debt Solutions |
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CoolConkers
Starting Member
United Kingdom
5 Posts |
Posted - 28 November 2010 : 22:45:34
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My partners car is bought and paid for. My car is on finance. If I stop the payments, then the car will no doubt be repossessed.
What's the best thing to do with it? Stop paying and wait for the tow truck to arrive? Sell to a dealer to clear the finance?
I know I'll lose the car. I just want to make it as painless as I can.
Could I just ring the finance company, say that I'm making no further payments and let them come and get it.
I rang the finance company and explained the situation. They said that they could accept say 15 months payments up front, and essentially freeze the direct debits, and resume payment collection 16 months from now. Again, this comes down to the preferential treatment thing.
The car is worth about £4-5k, with £2.3k outstanding.
It's a good reliable car, that's cheap to run. It would be a shame to lose it and have to run around in an old banger and all the expenses that entails.
Regards
CoolConkers |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 29 November 2010 : 09:27:35
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yes but what type of loan ?
This will dictate the possible outcomes
Richard |
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CoolConkers
Starting Member
United Kingdom
5 Posts |
Posted - 29 November 2010 : 14:44:10
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Hi,
I have the details.
It's a Hire Purchase agreement.
Cost of car at purchase was £8545
Cost of HP £988.36
Option Fee of £299
Total payable £9832.36
I part-ex'd a car paying down £4250 at the start.
I have paid 27 payments at £110 PCM.
I have 21 payments of £110 remaining, plus a final option fee of £299 on month 48.
I have the right to terminate once £4916.18 has been paid. I paid that amount quite early on, given the deposit I paid.
Repossession cannot now occur as I have paid a total greater than 1/3 of the total amount.
Hope that helps clarify the situation.
Regards
CoolConkers |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 29 November 2010 : 20:35:06
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Hi Cool conkers
thank you for clarifying
alas it is unlikely that you will be able to keep that car in Bankruptcy.
I would however suggest giving Paul (details as above) a call or email he has had some unusual occurences involving cars on HP.
regards Richard |
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Topic |
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Cars in bankruptcy
