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  • FIRST POST
    • maxmycardagain
    • By maxmycardagain 12th Oct 17, 8:04 PM
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    maxmycardagain
    Car in bankruptcy
    • #1
    • 12th Oct 17, 8:04 PM
    Car in bankruptcy 12th Oct 17 at 8:04 PM
    If a BR was the V5 registered keeper but it was on finance with no equity and a tool of the trade (taxi) might the IS leave it to the HP company to resolve the matter with the BR?

    car value circa £15000 equity nil... probably a minus amount

    the BR could at least make a living
    Instead of picking fault, pick up a life........ you might like it
Page 1
    • TheGardener
    • By TheGardener 13th Oct 17, 9:09 AM
    • 2,171 Posts
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    TheGardener
    • #2
    • 13th Oct 17, 9:09 AM
    • #2
    • 13th Oct 17, 9:09 AM
    The OR will of course be keen for a BR to be able to continue to work and if the car is essential to that then there is no benefit in them not allowing you the costs to continue to run it. Is it a business or personal BR?

    However, it may not be an asset as it is technically owned by the finance company and it is the finance company who will be making a decision on this. It is highly likely BR will be a breach of the finance agreement but if your payment history with the finance company is ok and they are not a creditor, then they might be flexible - you wont know until you ask them.

    I would also give Business Debtline a ring as business assets (if that's what it is ) are a bit more complicated in a personal BR
  • National Debtline
    • #3
    • 13th Oct 17, 9:13 AM
    • #3
    • 13th Oct 17, 9:13 AM
    Hi there,


    Vehicles subject to a hire purchase agreement in bankruptcy can be complicated. First of all, the hire purchase agreement is a provable debt and would be included in the order, meaning the vehicle would need to be returned. Not to mention that HP contracts can include an insolvency clause terminating the agreement in the event of a bankruptcy order. And it is also very unlikely the OR would permit you to pay the monthly payments from your income as that would directly affect an Income Payment Arrangement. It is for these reasons that most HP vehicles are lost in bankruptcy.


    However, if a third party (like a family member) was willing to take over the payments and the HP company consented to allow the 'contract' to run, you may be able to keep the car in these circumstances. But I would suggest you start by speaking to the HP company. If none of this is possible and without the car you would have no earnings, you should get further advice as to whether bankruptcy is the right option for you.


    Laura
    @natdebtline


    CROSS POSTS with The Gardener - please note I have based my advice on you working as a sole trader rather than a limited company but if this is not the case the advice can vary.
    Last edited by National Debtline; 13-10-2017 at 9:20 AM.
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • debt doctor
    • By debt doctor 13th Oct 17, 8:07 PM
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    debt doctor
    • #4
    • 13th Oct 17, 8:07 PM
    • #4
    • 13th Oct 17, 8:07 PM
    Hi,
    If you enter in to BR and the HP agreement has already defaulted and the car about to be repossessed then this would be a BR debt like any other.
    If the HP agreement was still valid and up to date then the agreement would vest in the OR as a potential asset. The OR would need to decide whether to pay off the agreement to realise the asset or to disclaim the agreement. There is normally not much equity in such an agreement, but could be - for instance if a substantial deposit was paid.
    As this is a secured debt, it remains outside the scope of BR until such a time the debt is unsecured. This does not take away any rights of the HP company who likely can terminate the agreement upon BR - but usually much prefer to keep receiving the payments.
    The OR could:
    Adopt and pay off the agreement to realise the car as an asset.
    Allow the bankrupt to keep the agreement if it were beneficial to the OR to do so (for instance if it kept the bankrupt in work and generated an IPA).
    Someone else could potentially make the payments to retain the vehicle.


    There would also have to be a discussion and agreement as to who would own the vehicle once the HP was paid off.

    I have seen all of the above happen in various bankruptcies.
    DD
    Last edited by debt doctor; 13-10-2017 at 8:20 PM.
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • maxmycardagain
    • By maxmycardagain 15th Oct 17, 7:57 AM
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    maxmycardagain
    • #5
    • 15th Oct 17, 7:57 AM
    • #5
    • 15th Oct 17, 7:57 AM
    If a debt came in post-BR linked to an issue PRE-BR (say a car repossessed needed a repair) does that debt get included in the BR?
    Instead of picking fault, pick up a life........ you might like it
    • maxmycardagain
    • By maxmycardagain 15th Oct 17, 7:58 AM
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    maxmycardagain
    • #6
    • 15th Oct 17, 7:58 AM
    • #6
    • 15th Oct 17, 7:58 AM
    Hi,
    If you enter in to BR and the HP agreement has already defaulted and the car about to be repossessed then this would be a BR debt like any other.
    If the HP agreement was still valid and up to date then the agreement would vest in the OR as a potential asset. The OR would need to decide whether to pay off the agreement to realise the asset or to disclaim the agreement. There is normally not much equity in such an agreement, but could be - for instance if a substantial deposit was paid.
    As this is a secured debt, it remains outside the scope of BR until such a time the debt is unsecured. This does not take away any rights of the HP company who likely can terminate the agreement upon BR - but usually much prefer to keep receiving the payments.
    The OR could:
    Adopt and pay off the agreement to realise the car as an asset.
    Allow the bankrupt to keep the agreement if it were beneficial to the OR to do so (for instance if it kept the bankrupt in work and generated an IPA).
    Someone else could potentially make the payments to retain the vehicle.


    There would also have to be a discussion and agreement as to who would own the vehicle once the HP was paid off.

    I have seen all of the above happen in various bankruptcies.
    DD
    Originally posted by debt doctor
    The HP is upto date payment wise.
    Instead of picking fault, pick up a life........ you might like it
    • TheGardener
    • By TheGardener 15th Oct 17, 8:34 AM
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    TheGardener
    • #7
    • 15th Oct 17, 8:34 AM
    • #7
    • 15th Oct 17, 8:34 AM
    If a debt came in post-BR linked to an issue PRE-BR (say a car repossessed needed a repair) does that debt get included in the BR?
    Originally posted by maxmycardagain
    Any debts incurred after the date on the BR order are not included in the BR. If the debt was provable before BR, it does.
    • maxmycardagain
    • By maxmycardagain 15th Oct 17, 9:04 AM
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    maxmycardagain
    • #8
    • 15th Oct 17, 9:04 AM
    • #8
    • 15th Oct 17, 9:04 AM
    Any debts incurred after the date on the BR order are not included in the BR. If the debt was provable before BR, it does.
    Originally posted by TheGardener
    Best to hold BR till the bill comes then.............
    Instead of picking fault, pick up a life........ you might like it
    • TheGardener
    • By TheGardener 15th Oct 17, 9:23 AM
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    TheGardener
    • #9
    • 15th Oct 17, 9:23 AM
    • #9
    • 15th Oct 17, 9:23 AM
    If the debt already exists its included anyway ?
    • maxmycardagain
    • By maxmycardagain 15th Oct 17, 12:29 PM
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    maxmycardagain
    If the debt already exists its included anyway ?
    Originally posted by TheGardener
    it hasnt been raised yet
    Instead of picking fault, pick up a life........ you might like it
    • Mouse007
    • By Mouse007 15th Oct 17, 1:29 PM
    • 98 Posts
    • 56 Thanks
    Mouse007
    If a debt came in post-BR linked to an issue PRE-BR (say a car repossessed needed a repair) does that debt get included in the BR?
    Originally posted by maxmycardagain
    I'd say it does. This is no different to a mortgage shortfall, a pre BR secured debt which subsequently goes south.
    • TheGardener
    • By TheGardener 15th Oct 17, 2:29 PM
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    TheGardener
    A car repair bill isn't a secured debt though. Mortgage debt only falls into BR once the house has been repossessed which means the debts is no longer secured.
    Anyone with an older car pre BR can not subsequently get it repaired and then ask that the bill is added to the BR debts which is what I understood maxmy to mean. If the repair work has already been done (pre-BR) then yes, its a BR debt as long as its provable.
    • Mouse007
    • By Mouse007 15th Oct 17, 6:34 PM
    • 98 Posts
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    Mouse007
    A car repair bill isn't a secured debt though. Mortgage debt only falls into BR once the house has been repossessed which means the debts is no longer secured.
    Anyone with an older car pre BR can not subsequently get it repaired and then ask that the bill is added to the BR debts which is what I understood maxmy to mean. If the repair work has already been done (pre-BR) then yes, its a BR debt as long as its provable.
    Originally posted by TheGardener
    I read it that the car was repossed and needed repair, debt is to the HP company (as a pre BR contract shortfall) not a garage. Maybe OP can claify what he's thinking about.
    • maxmycardagain
    • By maxmycardagain 16th Oct 17, 12:08 PM
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    maxmycardagain
    its more like a contract lease car returned due to default then a early termination fee

    sorry for the confusion
    Instead of picking fault, pick up a life........ you might like it
    • maxmycardagain
    • By maxmycardagain 21st Oct 17, 3:50 PM
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    maxmycardagain
    Oh well, if they want it back.....

    Instead of picking fault, pick up a life........ you might like it
    • maxmycardagain
    • By maxmycardagain 21st Oct 17, 11:55 PM
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    maxmycardagain
    I contemplated buying the BR's car but that would - if only briefly - on paper - make it an asset of the BR's and liable to seizure by the IS

    I cant see anyway a 3rd party (me) could purchase the car from the HP company without raising the attention of the IS.
    Instead of picking fault, pick up a life........ you might like it
    • Mouse007
    • By Mouse007 22nd Oct 17, 9:13 AM
    • 98 Posts
    • 56 Thanks
    Mouse007
    I contemplated buying the BR's car but that would - if only briefly - on paper - make it an asset of the BR's and liable to seizure by the IS

    I cant see anyway a 3rd party (me) could purchase the car from the HP company without raising the attention of the IS.
    Originally posted by maxmycardagain
    I'm not following you at all here, if a car is on HP it does not belong to the BR and therefore the OR (IS) will have no interest in it or any say in the matter.

    If you buy the car you buy it from the HP company and pay the HP company. The BR receives nothing.
    Last edited by Mouse007; 22-10-2017 at 9:14 AM. Reason: spelling
    • maxmycardagain
    • By maxmycardagain 22nd Oct 17, 10:32 AM
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    maxmycardagain
    I'm not following you at all here, if a car is on HP it does not belong to the BR and therefore the OR (IS) will have no interest in it or any say in the matter.

    If you buy the car you buy it from the HP company and pay the HP company. The BR receives nothing.
    Originally posted by Mouse007

    but will the HP company take cash off me, plus the BR will be on the V5 as the registered keeper upto the BR date at least, the IS will see he has a car...
    Instead of picking fault, pick up a life........ you might like it
    • Mouse007
    • By Mouse007 22nd Oct 17, 11:46 AM
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    • 56 Thanks
    Mouse007
    but will the HP company take cash off me, plus the BR will be on the V5 as the registered keeper upto the BR date at least, the IS will see he has a car...
    Originally posted by maxmycardagain
    The "registered keeper" is not necessarily the owner, they maybe and often are, but not always. The registered keeper (not owner) is the person who is responsible for traffic violations, ie the person parking and speeding tickets are sent to. The authorities want to know who is responsible for the driving (use) not who owns the car.

    Have a look at a V5, it actually has a big bold warning that “this document is not proof of ownership” on it - first line first page.

    This is very well known and understood by the IS. There would be nothing the OR could do if you bought the car from the HP company.
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