Bankruptcy in middle of situation changing

thecornflake

Hi,

VERY long story made short - lost my job (had a choice between being fired and quitting so I quit to give myself a better chance of finding a new job) and so sat down and figured out benefits situation on entitledto.com as we were literally about to start an IVA for our debts. Basically I either get another job earning not very much at all and get rent etc paid and benefits or I need a highly paid job matching what I was on (not easy to find at the moment). Anything in between just doesn;t add up. I've made the initial phone call to start the JSA application and have an interview at the jobcentre next Thursday.

I don't think we can do the IVA and so thinking about Bankruptcy. We privately rent and know the LL ois happy with people being on housing benefit as our neighbour used ot be, and I own a car worth around £4k but I would need a car for my work if I got another job.

I'd like to get the ball rolling but obviously it's possible that in the next few weeks I could either be on full benefits, or working. Should I wait a little while longer (bearing in mind at the moment I do have enough saved to pay for the bankruptcy and I should get the court fees waived at least anyway) or wait until the JSA etc is all sorted? I've already missed two months payments on all our debts because we couldn't afford to pay them and were just about to start the IVA. As I technically made myself unemployed is this going to affect it?

Plus is it reasonable for me to keep the car?

nervousmother

To be honest I cant see you keeping the Car, if it is prooven you need a car for work then the one you have would probably be sold and you would be given up to £2k to purchase another one.
Nothing is definate with cars though, if you get it in your mind you will loose it altogether then anything will be a bonus.

Merry_Gentry

Nothing to stop you filling in the forms, finding out how your court works, etc However, if you are not working it is very unlikely you would be allowed to keep your car. As NM says, they might allow you some money back to buy a cheaper one, but unless you can prove that without a car you can't find work they will most likely take it.

thecornflake

Thanks. If I was given more money to purchase another car that would be ok. Could I sell it to my parents say for a £1 and then buy it back off them?

Also, I forgot to ask - after I'm discharged, what happens if a couple of months later say, I get a really high-paying job? Presuming I wouldn't have a payment order because at the time of bankruptcy I was not working.

thecornflake

Merry_Gentry wrote: »

Nothing to stop you filling in the forms, finding out how your court works, etc However, if you are not working it is very unlikely you would be allowed to keep your car. As NM says, they might allow you some money back to buy a cheaper one, but unless you can prove that without a car you can't find work they will most likely take it.

I definitely need a car for work, it involves visiting clients a lot - there is no work in my profession in my local town, and most places there are jobs they are not accessible by public transport.

Merry_Gentry

Thanks. If I was given more money to purchase another car that would be ok.
There is no guarantee you would be given money to purchase another car, especially if you are unemployed.

Could I sell it to my parents say for a £1 and then buy it back off them?
This would be seen as disposing of assets and the transaction would be reversed. It would also seriously p1ss off the Official Receiver, who would probably go through your case with a fine tooth comb.

Also, I forgot to ask - after I'm discharged, what happens if a couple of months later say, I get a really high-paying job? Presuming I wouldn't have a payment order because at the time of bankruptcy I was not working
Anything that happens after bankruptcy is up to you - if you don't have a job whilst bankrupt, then no IPA.

thecornflake

Merry_Gentry wrote: »

Could I sell it to my parents say for a £1 and then buy it back off them?
This would be seen as disposing of assets and the transaction would be reversed. It would also seriously p1ss off the Official Receiver, who would probably go through your case with a fine tooth comb.

The situation is that I borrowed money from my parents to buy it, which I'm paying back. However they're ahppy to write off the debt in the current situation. I could say that I am giving them the car to repay the debt, then take it back once I've got a job and can carry on paying them back? I would serioulsy have trouble finding a good job without the car - I've applied for over 20 in the last few days, all of which need a car. I'm actually better off not working financially because of all the benefits but I'd rather be working!

Also the car has a three year guarantee that's non-transferrable. Plus it's just been serviced and had four new tyres (that was paid for with a tax rebate, before I knew I was going to lose my job :mad:)

Funny how things work out sometimes.

Merry_Gentry

The situation is that I borrowed money from my parents to buy it, which I'm paying back. However they're ahppy to write off the debt in the current situation. I could say that I am giving them the car to repay the debt, then take it back once I've got a job and can carry on paying them back? Nope - preferential treatment of a creditor is not allowed and can get you into big trouble. And if you did this, it would constitute preferential treatment.

I would serioulsy have trouble finding a good job without the car - I've applied for over 20 in the last few days, all of which need a car. I'm actually better off not working financially because of all the benefits but I'd rather be working! As I said previously, if you can prove that you need a car in order to find a job, the OR may give you money to get a new one but it's not guaranteed.

Going into bankruptcy, you have to be prepared to lose everything - then anything you keep is a bonus. Sorry to be the bearer of bad tidings.

thecornflake

Merry_Gentry wrote: »

Going into bankruptcy, you have to be prepared to lose everything - then anything you keep is a bonus. Sorry to be the bearer of bad tidings.

That's fine, I appreciate the honest advice.

thecornflake

Purely out of interest, and also I read in another thrad about the OR chasing something that had happened a while ago, if I transferred ownership of the car to my parents before applying for bankruptcy would they know about it, and if so how? Would they be able to see the records previous to the transfer? Can they look at other things like that?

Merry_Gentry

They can go through your records going back five years or more. They also liaise with other government agencies incl the DLVA I believe. I wouldn't advise it as a course of action, but each to their own.