Hi Guys, i am considering bankruptcy and was wondering where I stood with my car finance. I have a car with about 10k outstanding but car only worth about 6k would I loose the car.
sounds like a daft question but my wife and I use the car a great deal to ferry our two baby twins about and also as I have just being made redundant, (hence why I'm here asking your advice)I will be needing the car to get to interviews and possibly once I get a new job.
you will probably find that in the t&C's of your finance agreement the company can and probably will terminate your agreement, unless you can come to an understanding with them.
The OR would not be interested in the car itself because there is no equity for them to claim. However you would struggle to continue the finance commitments as the OR would view this expenditure as unnessessary and could be used towards an income payment agreement instead.
You may want to check to see what type of finance it actually is. Often people get confused between fixed sum loan agreements and HP. See what your documents say.
HP means the car belongs to the finance company until you have finished payin for it.
Fixed sum loan agreement means a personal loan which you used to purchase the car with. i.e the car is not actually finance!!
if the car is not actually attached to the finance as in the latter option you said, would it then mean that it would be classed as an asset by the or and taken???
if there is no HP atteched to the car and the value exceeds £2000 then the OR would want to sell it to realise the equity in it. if you had someone who was willing to pay the difference between £2000 and the agreed value then the OR would likely agree to them buying it for you. this is only if the OR agrees to the need for the car in the first place
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman) Life's too short!!!
if it in NOT hp then the very best option for you is to :-
1. downgrade the car to a value that can be retained in Br ( 2000ish) 2. use 510 for court fee 3. ensure car has 12 months tax, warranty and is serviced 4. balance of funds need to be accounted for so you can give these to the official receiver ot even pay for professional assistance.
You should also be aware that different OR offices view car + no job as an extreme so if you were to petition prior to getting a job i would definately prepare a comprehensive folder of jobs you have applied for and are applying for so they can see you are extremely active and likely to find one soon
doesn't effect the petition but as you have not got a job now the OR may not approve of costs & value of car so recommend:
1. check type of finance 2. if hp decide wether a third party would consider making monthly payments while br 3. check with fionance company if they automatically terminat on br 4. if not HP - i.e. fixed sum loan agreement - downspec the car to a 2k vehicle otherwise the OR will collect and possibly send you a cheque for a vehicle if they deem one necessary.
always better to take control yourself and make chocies that positively effect you rather than being told what to do.
Also my main reason for going bankrupt is my mortgage and the negative equity on my house. I have a joint mortgage with my wife. would she also need to go bankrupt?? as our main debts are joint??
Bankruptcy and outstanding car finance
Posted - 12 May 2009 : 22:51:19
