Have I caused myself probs with going BR?

Loopy_Rach

Hi there
Wondered if you could help with this scenario - I have not yet gone bankrupt or even got the petition I need, Im just at the stage of researching it to make sure its for me - Im currently on a DMP but this is going to take approx 11 years to complete so thinking BR might be the way forward.

I have a car on a HR deal where there is a balloon to pay at the end of the 3 years or you hand it back to the company - is that a PPP? The 3 years have ended and I decided to opt for a finance payment on the balloon - currently paying £140 per month for the next 2 and a bit years on this. Thing is, I've recently secured a job so close to home that its silly me keeping the car. So I've sold it and used the money to pay for bits and bob in my new house - carpets and furnature (approx 3 or 4 grand). I am still paying the £140 per month to the car finance company.

Have I now caused myself problems with being able to go BR? My debts consist of 11 grand (credit card and loan) + the outstanding balance on my car loan (PPP if thats the right term) (approx 4 grand). Will the courts look at this car loan and ask me where the heck the car has gone and the money from selling this?!

Thanks in advance for all advice - really new to all this and dont want to get into trouble.

Oldernotwiser

I thought it was illegal to sell a car with outstanding finance on it?

skylight

No you haven't caused problems. As long as you sold the car for its market value and not "cheap to a mate". Using the money for furniture etc is not a problem. Anyway, when you sold it off you were not intending BR at that point anyway, were you????????..........

CeeBeeDeeBee

Hi Loopy Rach

I'm new here too so not really an expert on this, however have you spoken to any of the debt charities about this? I have dealt with the CCCS and they have been quite good.

I believe there is a new thing called a debt releif order which is a mini bankruptcy for people who owe less than £15000, this might be good for you instead of bankruptcy.

CeeBeeDeeBee

Also have you looked at Never In Doubts thread about seeing if your credit agreements for your loan and ccard are unenforceable?

JCS1

Loopy_Rach wrote: »

Hi there
Wondered if you could help with this scenario - I have not yet gone bankrupt or even got the petition I need, Im just at the stage of researching it to make sure its for me - Im currently on a DMP but this is going to take approx 11 years to complete so thinking BR might be the way forward.

I have a car on a HR deal where there is a balloon to pay at the end of the 3 years or you hand it back to the company - is that a PPP? The 3 years have ended and I decided to opt for a finance payment on the balloon - currently paying £140 per month for the next 2 and a bit years on this. Thing is, I've recently secured a job so close to home that its silly me keeping the car. So I've sold it and used the money to pay for bits and bob in my new house - carpets and furnature (approx 3 or 4 grand). I am still paying the £140 per month to the car finance company.

Have I now caused myself problems with being able to go BR? My debts consist of 11 grand (credit card and loan) + the outstanding balance on my car loan (PPP if thats the right term) (approx 4 grand). Will the courts look at this car loan and ask me where the heck the car has gone and the money from selling this?!

Thanks in advance for all advice - really new to all this and dont want to get into trouble.

Check the paperwork for your car finance. If a loan it's fine, if it's HP then there may be an issue.

Loopy_Rach

Hi all

Thanks for your comments.

Skylight - thats just what I needed to hear! Good news is I sold my car to a private buyer who was not a friend or relative and this was sold at the market value at the time. At the time I had just started my DMP, so bankruptcy was not even a consideration of mine. Its only now (6 months later) that I am considering bankruptcy.

Sorry...I meant PCP. I am hoping what you have said will still be ok for a PCP.

JCS1

Check the small print of your car paperwork. Just googled a few Personal Contract Purchase and some state they are secured against the vehicle and others just state "loan".

debtinfo

Yep, as JCS says, very important to find out if the loan was secured on the car

Loopy_Rach

Thanks guys. will dig out the paper work and have a god look through this. Thanks again really appreciate your help.

CCCS_Matthew

I agree with the above. If it is a PCP agreement, which normally fall under the Hire Purchase agreement you may have sold the car illegally. You need written permission from the finance company to sell the car and normally they will only agree to it if you use the proceeds of the sale to settle the finance agreement.

The problem you would have is that if you were to go bankrupt, the HP company would normally collect the car back as you would not normally be able to keep the car whilst bankrupt. If you haven't got the car anymoe, this could cause an issue.

Definitely check the agreement, although to me it does sound like a PCP agreement given the fact you mentioned a balloon payment.

Matthew.