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tom_s
Starting Member
1 Posts |
 Posted - 13 February 2009 : 14:09:28
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| I am unemployed with debts in the region of £25k and no way to pay them. I have a partner who is pregnant and unemployed and we have a son. I wanted to know if i was to declare as a bankrupt would I loose my car - there is is still around £8000 outstanding on the loan I used to buy it. I am actovely looking for a job. As a tradesman, any job i get will require me to have transport so I can't afford to loose the car. |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 13 February 2009 : 14:27:27
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Hi and welcome.
I don't know the answer I'm afraid, but I just wanted to welcome you and tell you that an expert will be along shortly who will be able to advise you.
The glimmer gets brighter all the time
Jan
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coxy
New Member
United Kingdom
63 Posts |
Posted - 13 February 2009 : 17:35:18
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HI TOM S
You are allowed to keep a vehicle up to around 2500 if you need it for work and public transport isnt an option.
Not sure how you would go on if car is still on finance it may have to be surrended back to finance company.
I had or interview this week and am unemployed but looking for work and was convinced id lose my car but or said he had no interest in it but its only worth 800 though. |
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pix1
Average Member
689 Posts |
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pix1
Average Member
689 Posts |
Posted - 13 February 2009 : 18:06:34
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tom_s,
I just looked over thos elinks and found the following;
vi) Vehicles subject to finance agreements
(September 2008)
Generally, where a vehicle is the subject of a finance agreement, the official receiver must consider the type and terms of the finance agreement before deciding on the course of action to take. For further information see Case Help Manual part – Assets Subject to Credit
The terms of any hire purchase, conditional sale or leasing agreement usually gives to the other party to the agreement (referred to hereafter as the hiring owner) the right to terminate the agreement in specified circumstances. These circumstances will usually include the making of a bankruptcy or winding –up order and will generally allow the hiring owner to take back the vehicle.
Where a vehicle is subject to a finance agreement, the official receiver should contact the hiring owner. This contact should be by telephone in the first instance, followed up in writing. The official receiver needs to know the nature of the agreement, the amount outstanding under the agreement and the settlement figure required to conclude the agreement and obtain ownership.
From the value of the vehicle in question, the official receiver can then decide whether there would be any benefit to the estate in realising the vehicle. If there is no equity, the official receiver should inform the hiring owner that he/she does not intend to deal with it and that arrangements should be made to collect it as soon as possible.
Where the value of the vehicle is sufficient to allow for a surplus after settlement of any debt to the hiring owner and payment of the agent’s costs of sale, the official receiver should approach the hiring owner for his consent to a sale by the official receiver. Where the likely equity from such a sale is borderline, the official receiver can come to an agreement that the hiring owner dispose of the vehicle and hold any surplus to the official receiver’s order. Such decisions should only be made by the examiner and any relevant correspondence should be passed to them for consideration as soon as it is received.
No action should be taken by a case officer in this regard without the prior agreement of the examiner.
If a vehicle subject to finance has a cherished/personalised registration mark the official receiver will need to establish whose name is on the registration document for that vehicle. It is the registered keeper of a vehicle that has the right to transfer the registration mark, so where a finance agreement is in place, if the finance company are the registered keeper of the vehicle, they will have acquired the rights to that registration mark.
For more information regarding vehicles subject to finance that have a cherished/personalised registration mark, see TM Chapter 31.2 – Motor Vehicles, paragraph 31.2.15A
vii) What if the motor vehicle is an exempt asset with low value?
(Please note that these provisions apply to bankruptcy only.)
Exempt property does not form part of a bankruptcy estate and is therefore not automatically available to the trustee of that estate to deal with on behalf of the creditors. Amongst the items that may be exempted are motor vehicles that are necessary for the personal use of the bankrupt in his employment, business or vocation or where the vehicle is necessary to meet a basic domestic need of the bankrupt and his/her family. For the criteria that need to be applied when considering if a vehicle is exempt or not see Technical Manual chapter 31.2, part 3 and Case Help Manual part : Exempt Property
It is up to the bankrupt to prove to the official receiver that the vehicle should be treated as exempt. The examiner should record details of the bankrupt’s request for the motor vehicle to be treated as exempt within the narrative statement, or in the supplementary questions to the PIQ. If the official receiver is of the opinion that the vehicle in question is not necessary for the bankrupt’s personal use and the official receiver has reasonable grounds for forming that opinion, then the vehicle can be treated as part of the estate and dealt with accordingly.
Once the official receiver has decided whether the vehicle is exempt, the bankrupt should be notified on form REPR Exempt property - official receiver’s letter accepting/rejecting claim. All correspondence and documentary evidence relating to the claim and the official receiver’s decision should then be filed on the office file in the event that any dispute arises at a later date.
viii) What if the vehicle is an exempt asset but has value?
(September 2008)
Where a vehicle is exempt but it is worth an amount which justifies its replacement with a cheaper alternative under section 308 of the Insolvency Act 1986, a guideline maximum figure of £2000 has been introduced for an allowance for a replacement vehicle. The official receiver may exceptionally exceed this figure depending on the purpose for which the vehicle is to be used, but it is to be adhered to as frequently as possible. The £2000 limit may not be exceeded however, where the vehicle is treated as exempt because it is necessary to meet a basic domestic need.
An exempt vehicle should only be taken on the basis of providing a replacement if there will be a net realisation of a minimum of £500 to the estate after taking into account the cost of an agent’s fees and a replacement vehicle. A third party contribution equivalent to the estimated net value to the estate may be accepted to avoid seizure, sale and replacement.
Depending on the circumstances of each individual case the payment to purchase the replacement vehicle may be made to the bankrupt directly or to the vendor of the vehicle. It is recognised that a bankrupt may be able to obtain a better deal to purchase a vehicle by negotiating a private sale or attending a car auction and in such circumstances immediate access to cash is required. If an allowance from the proceeds of sale is made directly to the bankrupt then the official receiver should request evidence of the purchase of the vehicle within 21 days. See CHM part – Exempt Property
So, it looks like the finance company you have your car with will probably take back the vehicle.
If you were to get a cheaper vehicle (worth no more than £2500) and were able to show the IS examiner that you needed it for work you might be alright.
Ob viously, if bankruptcy is crucial it would be a pity for the issue of the vehicle to stop you. No doubt, you have an expensive loan on the vehicle you have and you would not need to keep paying this if you decide on bankruptcy. Perhaps you could save up enough to buy a replacement vehicle before petitioning bankruptcy.
It would be interesting to hear what others on the forum say.
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I am unemployed with debts in the region of £25k
