owning cars and bankruptcy

wannaBfree_3

Hi

We are going bankrupt. I have a car on HP which I assume will be repossessed. However, we are trying to save for 2 run around cars. I need one for work as I work 20 miles away, we can get one for about £500. My husband will also need one as we have 3 children, as he has to take them to school and nursery, and we can get a family car for about £900.

My question is when we go bankrupt will my cars be taken from us as we really need them?

Thanks.

skylight

Does your OH need one for work too? It may be better to go BR and then purchase the cars a few months after. The OR is not interested in them then (unless they are worth £1000's and they query where the hell you got that much money!)

With BR, the OR cannot take a car on HP as its not an asset - you do not own it. But some HP companies have BR clauses in them, allowing them to take the car if they want to. Your HP company may not want to take your car if you are up to date on payments or there is not long left to go outstanding or value has decreased a lot etc. It all depends on personal circumstances.

wannaBfree_3

skylight wrote: »

Does your OH need one for work too? It may be better to go BR and then purchase the cars a few months after. The OR is not interested in them then (unless they are worth £1000's and they query where the hell you got that much money!)

With BR, the OR cannot take a car on HP as its not an asset - you do not own it. But some HP companies have BR clauses in them, allowing them to take the car if they want to. Your HP company may not want to take your car if you are up to date on payments or there is not long left to go outstanding or value has decreased a lot etc. It all depends on personal circumstances.

well we will def need one for myself for work, but we can borrow my MIL car to use as the family car. My OH at the minute doesn't work.

As for my HP car we are upto date with the payments but we have only had the cra for a year and its a 5 year contract.

fiveyearplan

I wouldn't mention the fact that you can use MIL's car. Who's name is the car in thats on HP? Are you both going BR?

If you do have to give up your car you could have someone else buy the car in their name, just be sure they get a receipt in their name. You could still be the registered keeper but they will be the owner.

MrsST

Sorry to crash your thread wannaBfree but I've been panicking about keeping our cars too.

Can we get MIL to buy our car from us (at realistic market value) without getting penalised? It would mean we could keep running the car as she doesn't need it and frankly, we could do with the money to pay our BR fees.

Dez-Titute

Just a thought and it worked for me,

The registered keeper of a vehicle is not necessarilly the owner.

If that helps DEz

skylight

You are right about the registered owner bit BUT - my car, I own it, I paid (sort of!) for it and I run it. But its in OH registered name. It went down on my BR forms and I was prepared to lose it, but the OR decided that as the car was not registered in my name there was nothing they could do, so as really big surprise I got to keep it.

Its to do with proof and ease. A scrap of paper with "owners" details on them are not going to hold any weight with an OR and possibly a judge should it ever come to that.

But the point that is being missed is AFTER BR. You are made BR on your court date. Everything up to that point becomes the OR's responsibility, not after. So if you were to purchase a cheap run around a few months after your BR date then there is nothing the OR can do about it. He (She) can do something if your new car is worth £1000's as they will wonder where the money came from and they are likely to do a deep-seated investigation. Its the same as the OR is not interested in your bank account after your BR date, unless they become suspicious about something else.

The issue comes in having 2 cars on an I&E though in this case. One for OP where she works would be allowed, but running a car on an I&E that is not catagorised as essential will mean that those costs will have to come out of your surplus.

wannaBfree_3

skylight wrote: »

You are right about the registered owner bit BUT - my car, I own it, I paid (sort of!) for it and I run it. But its in OH registered name. It went down on my BR forms and I was prepared to lose it, but the OR decided that as the car was not registered in my name there was nothing they could do, so as really big surprise I got to keep it.

Its to do with proof and ease. A scrap of paper with "owners" details on them are not going to hold any weight with an OR and possibly a judge should it ever come to that.

But the point that is being missed is AFTER BR. You are made BR on your court date. Everything up to that point becomes the OR's responsibility, not after. So if you were to purchase a cheap run around a few months after your BR date then there is nothing the OR can do about it. He (She) can do something if your new car is worth £1000's as they will wonder where the money came from and they are likely to do a deep-seated investigation. Its the same as the OR is not interested in your bank account after your BR date, unless they become suspicious about something else.

The issue comes in having 2 cars on an I&E though in this case. One for OP where she works would be allowed, but running a car on an I&E that is not catagorised as essential will mean that those costs will have to come out of your surplus.

so would you say that its best if we buy the one car and say its for me to get to work, then buy another car which would really be for me to get to work a few months after we have gone bankrupt?

skylight

What are you planning on doing with the HP car?? Have you checked out the contract to see if there are any clauses? And would you want to/afford to keep it (if allowed??)

Yes, personally I would ensure that I had a car for work. Afterall, if I couldn't get to work then there would be no paid employment and no bills paid etc. That one is essential. After BR, OH would be using the hp car until a decision was made regarding that one (as in if they would take it). This may take a few weeks or a few months - but if in arrears or they feel like it, it would be sooner rather than later. If it went, I would use MIL car when needed and after a few months would buy a really cheap car for OH to take the kids around in, as the running costs for this one would have to come out of the surplus income and as its only until discharge anyway (or OH getting a job, whichever comes sooner - but OH getting a job would change the I&E and more likely to get an IPA etc....). The decisions!!


Cars are never straight forward in bankruptcy. There are no rules as such, only guidelines and each OR interprets these guidelines themselves (is a bit of a bone of contention on these boards!). But if you need one for work and its cheapish (less than £1k) you should keep it. OH not working though will not allow him to keep a car - there are exceptions, as in a disabled child or you look after elderly relatives. But these exceptions are at the discretion of individual ORs - no rules you see!

wannaBfree_3

skylight wrote: »

What are you planning on doing with the HP car?? Have you checked out the contract to see if there are any clauses? And would you want to/afford to keep it (if allowed??) the HP car £188 mth so we would just rather give it back. I read the contract and it said that we would have to pay half of the balance if we were to send the car back but I assume going BK would clear that anyway.

Yes, personally I would ensure that I had a car for work. Afterall, if I couldn't get to work then there would be no paid employment and no bills paid etc. That one is essential. After BR, OH would be using the hp car until a decision was made regarding that one (as in if they would take it). This may take a few weeks or a few months - but if in arrears or they feel like it, it would be sooner rather than later. If it went, I would use MIL car when needed and after a few months would buy a really cheap car for OH to take the kids around in, as the running costs for this one would have to come out of the surplus income and as its only until discharge anyway (or OH getting a job, whichever comes sooner OH might not get a job. I am on maternity leave but have to return to work in 2 months, however we have 3 children, 2 of which would need childcare if we both worked which would be £260 per week, so we can't afford to both work and since I earn the most I will have to work instead. 1- but OH getting a job would change the I&E and more likely to get an IPA etc....). The decisions!!


Cars are never straight forward in bankruptcy. There are no rules as such, only guidelines and each OR interprets these guidelines themselves (is a bit of a bone of contention on these boards!). But if you need one for work and its cheapish (less than £1k) you should keep it. OH not working though will not allow him to keep a car - there are exceptions, as in a disabled child or you look after elderly relatives. But these exceptions are at the discretion of individual ORs - no rules you see!

Thanks Skylight!

skylight

Lucky you with work! I can earn the most, but with 4 kids (and another on the way) OH refuses point blank to stay at home with them. We tried it for about a year and he was bloody useless at it - as in I worked and still had to do the housework/cooking etc.

Not trying to push/force but have you checked out tax credits as they can help with childcare costs etc.

And yes, the balance of the HP will be included in BR so they can jump off a short pier! Make sure the HP debt is included in your BR forms.