Car and Bankruptcy

mtysocks

Hi All

Im newly bankrupt and just finding my feet with things. I did post a question (on another topic) and was very happy with the help that I got. So, I am here again asking for some more help!

I just received a letter from the OR a few days ago saying that I could keep my car, it was only worth £500 or so. Anyway, i'm thinking of selling the car (for £ 400 rouhgly) and getting another car for about £700 max. Would I be able to do this? and do I have to ask the OR beforehand? Also, what happens with any money I receive for the car, do I have to disclose it and maybe give it back, and would I have to justify where I got the extra money for the car from?

All help and advice will be very much appreciated.

peachyprice

Once your car is exempt it's yours to with as you wish, you don't need to tell the OR if you change it, or even if you get rid of it altogether.

HTH

Captain_Longbeard

Once your car is exempt it's yours to with as you wish, you don't need to tell the OR if you change it, or even if you get rid of it altogether

Not quite right... If you sell it and you make more than you disclosed it was worth, then you have an obligation to tell the OR and they will decide if they want any of the surplus.

Likewise, if you want to buy another motor, and have the cash to do so, then the OR will be interested in how you have the cash to do this.

Remember that as a BR, you lose ALL control of your own finances - all your decisions for the next 12 months are made by the OR and/or any trustee thereof.... It's better to be totally open and honest with the OR rather than risk cheesing them off. If your motor is cream crackered and you need to replace it, give the OR all the details. They will listen, and it will be better than them finding out that you've not disclosed something. As trivial as it may seemh, it's always worth keeping on the right side of the OR.....

mtysocks

Hi

Thank you for your replies.


If I did sell my car, it would be for £400. I have seen a few cars off Ebay that are ending at upto £800. I can justify where I got the extra money from, as I was awarded a refund, and the OR told me I could keep it. As such, I have withdrawn it from my bank account anyway.

If I bought a new car for £800, would I have to let the OR know about this? Also, if say the car is worth £2000 then would they ask for it to be put back into the bankruptcy estate? or try and sell it off again? I need a car for work if that helps.

peachyprice

Captain_Longbeard wrote: »

Not quite right... If you sell it and you make more than you disclosed it was worth, then you have an obligation to tell the OR and they will decide if they want any of the surplus.

Likewise, if you want to buy another motor, and have the cash to do so, then the OR will be interested in how you have the cash to do this.

Remember that as a BR, you lose ALL control of your own finances - all your decisions for the next 12 months are made by the OR and/or any trustee thereof.... It's better to be totally open and honest with the OR rather than risk cheesing them off. If your motor is cream crackered and you need to replace it, give the OR all the details. They will listen, and it will be better than them finding out that you've not disclosed something. As trivial as it may seemh, it's always worth keeping on the right side of the OR.....

Sorry captian longbeard, that is incorrect.

Once a car is exempt it is no longer an asset the OR has any control over and you are free to do with it as you wish.

I also asked my examiner in my face to face interview the direct question "What if I sell it for £2500 and buy and new one for £1500, presumably I have to hand over the difference" the answer was NO, most definitley not.

peachyprice

mtysocks wrote: »

If I bought a new car for £800, would I have to let the OR know about this? Also, if say the car is worth £2000 then would they ask for it to be put back into the bankruptcy estate? or try and sell it off again? I need a car for work if that helps.

No they couldn't, once your car is exempt the exemption is good for any car you own whilst BR, they cannot reverse that.

If you car hadn't been exempt, or you didn't own the car at the time of BR the OR could consider taking it for your estate as an accquired after asset. But that is not the case for you.