2 cars owned by non bankrupt partner

diane456

My Mum and Dad need 2 cars. They have just sold Dad's car and bought a smaller, cheaper to run one and put it in Mum's name with her paying the finance. Dad is going BR as his hairdressing business closed leaving him with lots of debt. They are in their early 60's and feel very shameful and lost, so I'm trying to help as much as I can.

They were advised by CAB to sell Dad's car as it wouldn't be exempted due to the value, they did this and got £5500 for it. They paid the outstanding finance and bought another car for £3000.

CAB have advised that the new car should be registered in Mums name, with the insurance policy being in Dad's name with Mum as an additional driver. Does this mean the OR would not be interested in it?

My sister and I bought their house for them in 2003 and there is just a bit of equity in it - about £4000 - would this be safe? My sister and I pay their mortgage and Mum and Dad pay us nominal rent.

Also, any advice that I can offer to them to help them come to terms with, what they feel is an unforgivable situation with lots of stigma attached? It's very hard seeing them so broken. They've never been in debt in their lives and this is really hurting my Mum in particular.

JCS1

As an asset has been sold, your Dad will have to account to the OR as to where the proceeds went. With the car now being in your Mum's name, it might be viewed as a transfer of an asset and cause a few problems.

Your parents are of the generation that view bankruptcy as something shameful, my Mum still mentions the shame to the family when my great uncle went bankrupt in 1950 something. Just show them the insolvency figures over the past year, and they will realise they are not alone. If that fails, how about their GP who may have list of support groups/counsellers in the area?

deedee_3

diane456 wrote: »

My Mum and Dad need 2 cars. They have just sold Dad's car and bought a smaller, cheaper to run one and put it in Mum's name with her paying the finance. Dad is going BR as his hairdressing business closed leaving him with lots of debt. They are in their early 60's and feel very shameful and lost, so I'm trying to help as much as I can. Well done in supporting them through this. There is no need to feel ashamed, tell them that if Richard Branson can do it , they can to.

They were advised by CAB to sell Dad's car as it wouldn't be exempted due to the value, they did this and got £5500 for it. They paid the outstanding finance and bought another car for £3000. They are going to be in trouble here. It was HIS car and they have sold an assett and at £3000 the OR will certainly be interested in it.

CAB have advised that the new car should be registered in Mums name, with the insurance policy being in Dad's name with Mum as an additional driver. Does this mean the OR would not be interested in it? Sorry I think they have been badly advised here.

My sister and I bought their house for them in 2003 and there is just a bit of equity in it - about £4000 - would this be safe? My sister and I pay their mortgage and Mum and Dad pay us nominal rent. Who's name is the house in?

Also, any advice that I can offer to them to help them come to terms with, what they feel is an unforgivable situation with lots of stigma attached? It's very hard seeing them so broken. They've never been in debt in their lives and this is really hurting my Mum in particular.

There is not the stigma that they used to be. Have a look at the famous bankrupts thread and show them they are not the only ones. I will see if I can bump it up for you.

peachyprice

I have to say I'm very surprised at the advice received from CAB, your dad has in effect disposed of an asset. The OR can undo this and take the car back.

You say they need 2 cars, is this because your dad needs one for work? If this is the case it's highly unlikley the OR would have taken it if he'd bought a new car for around £2-2.5k

diane456

Sorry, I don't think I was clear, the outstanding finance on my Dad's car was £4987, so he got £563 after paying the finance off and is using this to pay his fees.

They work in different directions and at different times, hence the need for 2 vehicles.

The house is in mine and my sisters name and has been since purchase.

Thank you for your support everyone

deedee_3

Ah! that makes it clearer, thank you. Then they should have no problems with that. He just has to put the car he uses down under cars he has use of. As long as he can show the OR the paper trail then there will be no problem.

The house will be fine as well as they only rent it.

I hope it all goes well for them and don't hesitate to ask anything you need to.