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Colin.jw
Starting Member
1 Posts |
 Posted - 08 January 2011 : 20:20:23
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| Hi everyone I was wondering if anyone has any advice regarding leasing a car and the costs being allowed against expenditure.My wife needs a car for work and to take the kids to school and back.Her car has packed up and will cost more than its worth to fix.She has been recomended a leasing company who will lease a small newish vehicle for around £150 per month which we could afford.However we are looking at filing for bankcruptcy and wonder wether this would be allowed against claimable expenditure.I know they allow a car for work as long as its not expensive say under £1500 and this would be worth more than that but this would not be owned by her and would probably be a cheaper way of running a car (ie more reliable etc).Anyway thankyou to anyone who can respond. |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 09 January 2011 : 12:37:31
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Hi colin
Are you both petitioning for bankruptcy ?
Taking out credit knowing that you are going to petition for BR would be frowned upon
you would have to speak to the lease company, explain the situation and seek their views, i think that they would run away from you.
Good luck Richard |
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RHB
Senior Member
1159 Posts |
Posted - 09 January 2011 : 12:45:41
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| If it is leasing & can go back any time then is this taking credit? |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 09 January 2011 : 14:20:52
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good point RHB
aren't car leases a loan of a car over an agreed period, if you hand the car back early most companies would want recompense.
lease companies could be very nervous about allowing an arrangement to take place if an unknown client was about to petiton for BR
Colin and Mrs Colin would have to justify the need for a newer car to the OR it obviously can be done as there is another posting talking about the lease of a car
I used a beaten up Corsa to get me to work and drop family at school. In a wierd way it was the start of my finacial rebuild. I did not have to rely on finance, hard work but the best 375 i spent.
Richard
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debtinfo
forum expert
2826 Posts |
Posted - 09 January 2011 : 16:58:58
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It is unlikely that the OR would allow the car payments anyway unless you were something like a taxi driver or white van man and it was a business expense
Is the school in walking distance could she get the bus to work? |
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Bigal4787
forum expert
United Kingdom
641 Posts |
Posted - 11 January 2011 : 14:56:01
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Hi Colin,
Regarding car leasing, this is an extract from the technical manual that the OR uses:
31.2.10 Vehicles subject to rental or lease agreements
The rights of an insolvent under a leasing agreement may be no greater than simply a right to possession and use while rental payments are kept up to date. In such cases the official receiver should send notice of the winding up or bankruptcy order to the lessors as quickly as possible and make the necessary arrangements for the lessors to deal with the vehicle without delay. The official receiver should also inform the bankrupt of this proposed action.
In any case where the agreement contains a clause permitting ownership to be transferred at some point to the insolvent, before deciding whether to terminate the agreement, the official receiver should consider if there would be any potential benefit to the insolvent’s estate through the exercise of the right to transfer ownership. It should be noted that many finance arrangements now provide for substantial final payments which may make obtaining title impractical.
From the above, the OR would take the same action as for a car on a finance agreement,i.e. inform them of the bankruptcy, in which the finance company has the option to repossess the vehicle due to bankruptcy, so it's highly likely that this would not be an option, unless of course you were a tradesman which was needed to carry on in the business.
Big Al
Insolvency examiner with the Insolvency service from April 2008 - July 2010.
If you need help completing SOA's(statement of affairs) or PIQ's(preliminary information questionnaire) if you've been declared bankrupt, or anything else and you're within 30 miles or so of Warrington, then please contact me via my contact details in the expert page for futher details"
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Is leasing a car an allowable expense while br ?
