Need advice please- going Bankrupt this Thursday

SCM39

Hi Everyone

I am going bankrupt this Thursday and would really appreciate some advice.

Firstly, i would like to post on here my SOA but I cant find the link...could someone kindly post it for me?

Secondly - I currently rent a house with my partner (my house I brought with my now Ex-husband is in the process of being repossessed) and we split the rent and all bills incl food etc 50/50 so do I fill the SOA with just my earnings and put down my 50% that I pay towards everything or do I put down my partners contribution (which will be 50%) too or does the form ask for his total monthly income, which wont take into account that he has some of his own bils to pay like maintenance etc that have nothing to do with me?

Also - my house (which is in joint names with my ex-husband) which is being repossessed and there will be a shortfall once the mortgage company sell it, once I am bankrupt, any shortfall will it go into the bankruptcy pot so to speak or will they go after my ex for it - he moved back to the ROI and thinks he is untouchable :mad:

Finally - in March I part exchanged in my car for another which is now worth about £4500 but has no service history - my partner paid £800 towards it too - will the OR take it off me and if so do they have to give me some money back for a cheaper car? and will they pay back to my partner his money that he paid into it? I really need my car as I have to take my daughter to morning club and collect her from after school club as well as working full time, also standing in a que for tain bus is a no go too as it is very painful as I have a prolapsed disc which I have had steroid injections for an am about to have Radio Frequency Ablation treatment. The car is also in my partners name and not mine - the reason we did this was to stop my ex husband getting his hands on it...

Thank you....

samantha2312

Just found this on another post regarding car!
Most individuals who are entering into Bankruptcy, nearly always ask what happens to my car, will I be allowed to keep it, will the Official Receiver take it, and so on.

This post is designed to help you answer some of those questions, and has been derived from the guidance that is available to the Official Receiver (which was last updated in April 2006) information from the Insolvency Act 1986 and from the Enterprise Act 2002.

However, it is not authoritative, simply because the Official Receiver has to rely on his interpretation of the circumstances, so if you are looking for a vehicle to be exempt, it is up to you to provide the necessary evidence and show good reason.


Use of discretion

The Official Receiver should use his/her discretion to take action which is practical and expedient but which is also in the interest of the estate and of The Service in keeping administration costs down. The facts should be considered on a case by case basis.


Definition of the Bankrupts Estate

The bankrupt's estate comprises all property belonging to or vested in the bankrupt at the commencement of the bankruptcy except,

• such tools, vehicles and other equipment as are necessary to the bankrupt for use personally be him/her in his/her employment, business or vocation and,
• such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his/her family.

subject to certain excluded property reclaimable by the trustee

A motor vehicle may be exempted in very limited circumstances


Value of the vehicle

In general, the official receiver may rely on the Parker’s Guide which can be accessed via the Intranet under 'Useful Contacts' and is updated regularly, to find out the guideline value of a vehicle. In any event, it may be necessary to use agents to value a specialist vehicle, like a vintage car, which is not covered in Parker’s Guide.

It is important for the official receiver to establish the value of the vehicle so that a decision can be made as to whether the sale of the vehicle will result in a net benefit to the insolvent’s estate once the cost of insurance and the agent’s fees, together with any outstanding debt to a finance company, have been taken into account. The value must also be provided on the Willis application form if the official receiver wishes to effect insurance cover on the vehicle.

When establishing the value of the vehicle, consideration should also be given as to whether there is a value to the registration mark, which there may be if the registration mark is considered to be ‘cherished or personalised’ or is in some other way special or unusual.



Partnerships

The exempt property provisions do not apply to a vehicle that is the property of a partnership.

This is the case when the partnership is wound up, an unregistered company in conjunction with petitions presented against the individual members or where the individual members petition for their own bankruptcy and there is no petition to wind up the partnership.

A vehicle belonging to an insolvent member of a partnership personally may be considered as exempt property where that person is also a bankrupt.


Motor vehicles not exempt property

The Official Receiver must be satisfied that there are no reasonable grounds apply before taking action to claim or dispose of the motor vehicle for the benefit of the estate.

It is important that the Official Receiver believes, and has reasonable grounds for believing, that he/she is entitled to seize or dispose of items which he/she does not consider are exempt property in order to gain the protection afforded by law.


Bankrupt claiming vehicle as exempt property

It the bankrupt's responsibility to satisfy the official receiver that a vehicle is exempt property, i.e. that it is necessary for his/her use personally in his/her employment, business or vocation, or is necessary to meet the basic domestic needs of the bankrupt and his/her family.

In the case of a claim for exemption to meet domestic needs the official receiver must be satisfied that the motor vehicle is necessary to the extent that no practical alternative exists, to meet a genuine need and not merely a matter of convenience.

If the use of a vehicle does not meet the test for necessity the vehicle is vested in the bankruptcy estate and the official receiver as trustee should instead pursue with the bankrupt the option to make a reasonable offer for the purchase of the vehicle

The bankrupt's claim should be dealt with at the initial interview in either the narrative statement or in supplementary questions to the Preliminary Interview Questionnaire.

The bankrupt needs to be able to satisfy the official receiver that the vehicle is both necessary for his/her employment, business or vocation and is necessary personally to the bankrupt. This does not mean that the vehicle must be used exclusively by the bankrupt but it must be necessary to him/her not just to the other users.

Whether or not a vehicle is exempt property is in some cases a difficult question. In such circumstances, official receivers will need to use their discretion and consider each case according to its merits within the guidelines issued to official receivers.

In all cases official receivers should apply the guidance strictly and rigorously. It is for the bankrupt to convince the official receiver that any motor vehicle is necessary within the exemptions.

The value of the vehicle is not a determining factor.


Bankrupt claims he/she needs vehicle for work

When considering whether to exempt a motor vehicle the principal points that the Official Receiver has to consider are;

• whether the vehicle is used by the bankrupt in his/her employment, business or vocation,
• that the bankrupt could not reasonably travel to and from his/her place of employment without a vehicle, due to lack of alternative transport,
• that the bankrupt’s prospects of obtaining employment would diminish without use of the vehicle, even though the bankrupt may not be in employment at the date of the bankruptcy order. In such cases, the official receiver will need to decide whether there is a reasonable prospect of the bankrupt obtaining work,
• that a self employed bankrupt who does not have work at the date of the bankruptcy order may be able to retain a vehicle as an exempt asset if he/she can satisfy the official receiver that there is a reasonable prospect of him/her obtaining work, and
• that the bankrupt’s prospect of obtaining work would diminish even if a vehicle requires repair but will then be used to travel to work or to seek employment.

The bankrupt must satisfy the official receiver that a vehicle is necessary. If the bankrupt cannot do so, and the official receiver has reasonable grounds for believing that the vehicle is not exempt, he/she is entitled to treat the property as part of the estate and deal with it accordingly.


Bankrupt is a carer for a relative

Caring for others clearly can be a vocation and the means by which an individual earns their living (e.g. nurses, care assistants) there seems no reason why caring for another, who is in fact a relative, should be treated any differently. There are considerable number of "informal" and upaid carers in the country who would describe their "vocation" as that of a carer. Many may be eligible for a carer's allowance, an income maintenance benefit for those who are required to care for a severely disabled person. The allowance is a taxable benefit for informal carers, payable where the carer looks after a disabled person for at least 35 hours per week.

A bankrupt might therefore not be in paid employment and have no prospect of obtaining employment as a result of having taken on the care of a disabled relative (including a child). In considering whether the bankrupt has a "vocation" as a carer a material issue would be the time involved in undertaking the care, the receipt of any carer's allowance and the level of care required. For example the normal care of a child reasonably expected of a parent is not a "vocation" in this context but a parent caring for a disabled child would fall into this category.

In respect of a claim for a vehicle to be exempted, the definition of "employment, business or vocation" has been widened following recent case law to include debtors who are informal, full-time, carers of a disabled friend or relative who would use the vehicle in connection with that role. The receipt of a carer's allowance is not essential but will be indicative that the debtor is pursuing a "vocation" as a carer.


Bankrupt claims he/she needs vehicle due to disability or for domestic use

A bankrupt may inform the official receiver that he/she suffers from a disability and that his/her motor vehicle is necessary for mobility or inform the official receiver that the vehicle is necessary for domestic use (e.g. to take children to school). The official receiver should treat such cases sympathetically but where the exemption provisions as laid down in the legislation do not apply the motor vehicle cannot be treated as exempt property by the official receiver

It is for the bankrupt to convince the official receiver that the motor vehicle is necessary, to the extent that no practical alternative exists, to meet a genuine need and not simply as a matter of convenience. If the use of vehicle does not meet the test of necessity the vehicle is vested in the bankruptcy estate and the official receiver should instead pursue with the bankrupt the option to make a reasonable offer for the purchase of the vehicle

For the purpose of determining necessity, a reasonably practical alternative does not mean no alternative. In most cases, a taxi service would offer an alternative to a private vehicle, but it should be borne in mind that the costs of regularly using such a service might well exceed the costs of maintaining a modest vehicle and thus compromise the debtor's ability to contribute to an income payments order/agreement. For example, a task that needs to be undertaken daily might be prohibitively expensive by taxi, but undertaking a weekly shop at the supermarket may well reasonably be achieved by using a taxi service rather than retaining the use of a vehicle.

It is anticipated that the bankrupts most likely to benefit from the wider interpretation of exempt property, and the claims most likely to succeed, will be from bankrupts who suffer from a disability and state that the motor vehicle in question is necessary for mobility. In such cases, the bankrupt's disability would prevent them from seeking employment. Where this is the case, the official receiver must be satisfied that the vehicle allows the bankrupt a degree of independent living which would be impossible without the retention of a vehicle, and/or that there is no practical alternative to allow the bankrupt to undertake routine medical appointments or care associated with their disability.

In such cases, the vehicle should be used personally by the bankrupt and must not be a vehicle maintained for another's exclusive use with occasional assistance and transportation given to the bankrupt. If the bankrupt requires the assistance of another to travel, even in a motor vehicle, then the vehicle does not come within the exemption. Should this be the case, the main user of the vehicle should be invited to make an offer to purchase the vehicle

Bankrupts who live in an urban area with reasonable transport links are unlikely (other than as a result of disability) to be in a position to claim that a motor vehicle is necessary to meet a domestic need. For this reason, a decision that a motor vehicle is exempt property, unless the vehicle is required for employment or is by reason of the bankrupt's disability must be confirmed by an assistant official receiver.

Where a bankrupt claims to require a vehicle to transport children to and from school,

He/she will need to demonstrate that there is no public transport alternative or that the distance to travel would make walking (or cycling) an impractical alternative. It is not sufficient for a bankrupt who lives in a rural area to claim a motor vehicle simply by virtue of distance from the school. The bankrupt must provide a statement that there is no transport alternative (e.g. a local authority school bus service) or, if there is more than one child, show that diverse locations makes it impossible to transport all the children to school by public transport. The practical problems such as organising children to walk to school, to travel with more than one child on public transport, or any general concerns expressed about safety are simply a matter of convenience and in such cases the vehicle is not necessary to meet a basic domestic need. However, if the children attend school in opposite directions and could not physically be delivered at school on time without the aid of a motor vehicle, it might be considered necessary to the household.
Exempt vehicles of excess value

Where an exempt vehicle appears to have a significant value, the official receiver, when acting as trustee, may claim it for the estate if he/she considers that the realisable value of the vehicle exceeds the cost of a reasonable replacement. The vehicle must be claimed by notice in writing no later than 42 days after it came to the knowledge of the trustee (in the case of the official receiver, on his/her becoming trustee). Any notice after this time can only be made with the leave of the court. The official receiver should not normally take any steps to claim an exempt vehicle unless the potential net realisation to the estate is at least £500 after taking into account any costs of sale and of a replacement vehicle. A third party contribution equivalent to the net value of the car to the estate may be accepted to avoid the seizure, sale and replacement of the vehicle.

The official receiver will need to consider the nature of the bankrupt’s business in assessing whether a vehicle has excess value since in the past the courts have concluded that a bankrupt could retain a high value vehicle because he/she operated a business which provided chauffeur driven vehicles.


Provision of a suitable replacement

Where a decision is made to replace an exempt vehicle with a cheaper alternative the official receiver should inform the bankrupt of the amount he/she is prepared to make available out of the sale proceeds. The official receiver has discretion as to the amount allowed for the replacement which should be sufficient for the bankrupt to buy a replacement vehicle which is suitable for his/her needs. For consistency between official receiver's offices a guideline maximum figure of £2,000 has been introduced. While official receivers may exceptionally exceed this figure depending on the purpose for which the vehicle is used, it should be adhered to as frequently as possible.

Depending on the circumstances of each case the payment to purchase the replacement vehicle may be made to the bankrupt directly or to the vendor of the vehicle. The most secure way to undertake the purchase is payment direct to the vendor. It is recognised that a bankrupt may be able to obtain a better deal to purchase a vehicle by negotiating a private sale or attending a car auction and in such circumstances immediate access to cash is required. If an allowance from the proceeds of sale is made directly to the bankrupt then the official receiver should request evidence of the purchase of the vehicle within 21 days.


General policy on disposal of motor vehicles

Where a motor vehicle is not subject to any finance agreement and the official receiver considers that it is not an exempt asset, steps should be taken to dispose of the vehicle as soon as possible. The vehicle should be disposed of even if it appears that there may be an insolvency practitioner appointed to deal with the estate later as a vehicle is a potential source of liability and must be dealt with accordingly.

The use of agents in the sale of a motor vehicle is not mandatory. A private sale by the official receiver may result in a better realisation for the insolvent's estate. If the official receiver is unable to reach an agreement with the bankrupt /director for the sale of the vehicle or if the bankrupt/director is unable to meet all the criteria for the purchase of the vehicle the official receiver should employ agents to sell the vehicle.

In bankruptcy, where a bankrupt has expressed a wish to keep the vehicle, wherever possible the disposal of the vehicle should be effected so that the bankrupt retains use of the vehicle. In company liquidations there is no necessity to make special efforts designed to give a director continuing use of the vehicle.

Disposal of a vehicle to a director/bankrupt should be dealt with by the local official receiver's office at an early stage and should not be left to the RTLU.



Offer to purchase

Where a motor vehicle is not the subject of any finance agreement and the official receiver considers that it is not an exempt asset, steps should be taken to dispose of the vehicle as soon as possible. This is still true even if it appears that there may be an insolvency practitioner appointed to deal with the estate later as a vehicle is a potential source of liability, including for example storage charges, and must be dealt with accordingly.

Having obtained the vehicle’s guideline value, by reference to Parker’s Guide, the bankrupt should be asked by the examiner in the first instance, whether he or she is interested in retaining the vehicle. This may be possible provided he/she:

• Can arrange for a third party (possibly, but not necessarily, his or her spouse) to provide the necessary funds to pay for the transfer of the vehicle from the estate to either the third party or to the bankrupt (as the third party may direct)
• Can provide a current insurance certificate
• Can provide the vehicle’s registration document
• Will sign a certificate stating that the vehicle is to the best of his/her knowledge in a roadworthy condition (MVCERT) or declaration (see Annex A and

The bankrupt should provide the funds and necessary documentation as a matter of urgency since any undue delay will result in the official receiver instructing agents to remove and dispose of the vehicle.

Funds must be provided by way of cash, a banker’s draft or a building society cheque. Personal cheques are not acceptable. If the disposal of the vehicle results in a change of registered keeper, the official receiver must send the relevant documentation to the DVLA.

It is not expected that the disposal of a vehicle will be undertaken by the Regional Trustee Liquidator Unit (RTLU) and care must be exercised to ensure that the sale cannot be criticized by any future insolvency practitioner.

Official receivers are reminded that the discretion to negotiate a sale price still remains and any reasonable offer should be considered. While this means that the guide price for a vehicle might not always be achieved, it does not mean that ridiculously low offers have to be accepted. The outstanding value of any road fund licence in respect of the vehicle should also be taken into account when agreeing a price, but note that a refund can only be claimed for any whole unexpired months.

If a vehicle has no apparent resale value (e.g. because of age) a nominal sale price of £10 plus the outstanding value of the road fund licence can be agreed. Also, in instances where the motor vehicle is unroadworthy, the official receiver may sell the vehicle to the bankrupt for a nominal fee, rather than arrange for the vehicle to be scrapped. The bankrupt would have to sign a declaration that he/she acknowledges that the vehicle is unroadworthy and that he/she would not use or park the vehicle on the public highway in that state. This declaration is to provide the official receiver with the protection required under section 75(6) of the Road Traffic Act 1988. A copy of the declaration to be used can be found at Annex A and B.

MicheH

OOOh thanks, thats just answered all my questions in a post I have just posted. Thanks again

SCM39

Thank You Samantha2312

Any replies to my other questions? anyone??

fiveyearplan

Here is the SOA calculator. When you get to the bottom format for MSE. You put down your total income and your partner's contribution and the full amount for all joint expenses and your personal expenses ie you wouldn't put down his mobile or travel etc. This is the reason you don't put down his total income because he has expenses of his own to pay.
http://www.makesenseofcards.com/soacalc.html