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Keeping HP Car

Hi All,

Courtdate for Bankruptcy is on the 15th Jan. Been on the phone to Car Finance people re keeping the car and they have said that they will allow me to keep the car as long as the paymets are kept (which they will be). They said that it all depends on the OR and what they want to do with it. The man at the car finance company said that the OR will probably allow me to keep the car because it will be of 'used car value' and won't be seen as an assett and that they will have no interest in it. I was just wondering what the liklihood of this happening will be because that's what is going to be the most heartbreaking, loosing the car.

Thanks All

x

Comments

  • debtinfo
    debtinfo Posts: 7,012 Forumite
    Hi, hope i can help you.

    first i just need a few details

    1) are you sure that it is HP and not some other type of finance.
    2) How much is the car worth
    3) how much is owed to the HP company
    Hi, im Debtinfo, i am an ex insolvency examiner and over the years have personally dealt with thousands of bankruptcy cases.
    Please note that any views i put forth are not those of my former employer The Insolvency Service and do not constitute professional advice, you should always seek professional advice before entering insolvency proceedings.
  • Hi,

    Thanks for the reply.

    1 - Yes it is HP/Conditional Sale. The man in the specialised team definateley said that I would be able to keep the car when I spoke to him today.
    2 - I'm not sure how much the car is worth, it was new when I got it in March.
    3 - The balance is approx £10k with a settlement of £9K.

    What the man did say is the OR would have no interest in the car because it is not an assett and that the car's value would be that of a used car.

    Thanks again for the reply!
  • dojoman
    dojoman Posts: 12,027 Forumite
    gazesque wrote: »
    Hi,

    Thanks for the reply.

    1 - Yes it is HP/Conditional Sale. The man in the specialised team definateley said that I would be able to keep the car when I spoke to him today.
    2 - I'm not sure how much the car is worth, it was new when I got it in March.
    3 - The balance is approx £10k with a settlement of £9K.

    What the man did say is the OR would have no interest in the car because it is not an assett and that the car's value would be that of a used car.

    Thanks again for the reply!

    How much was the car when you purchased it?
    How much are the monthly payments?
    The bit I have highlghted in red is wrong, no one can predict what the OR will do about cars. It will be up to the OR who handles your case as to what will happen to it. But you will need an up to date valuation to see whether it has any equity in it.
    :pB&SC No. 298
    Life`s Tragedy is that we get OLD too soon
    and WISE too late!
  • debtinfo
    debtinfo Posts: 7,012 Forumite
    hi.

    It is not quite that straightforward.The OR will look at the value versus the debt and see if there is any equity. (the OR usually users parkers guide, stick it into google its free). If there is no equity then the OR will declare no interest and then it is between you and the HP company, which in your case looks to be in good order. If there is a significant amount of equity the OR may adopt the agrement sell the car and pay of the the HP agreement.

    The other problem you may come up against is when doing your income/expenditure. The OR may not allow the HP repayment as an essential expenditure which means that it may have to be paid out of the part of any surplus that the OR leaves you (will their be sufficient surplus to make the payments)
    Hi, im Debtinfo, i am an ex insolvency examiner and over the years have personally dealt with thousands of bankruptcy cases.
    Please note that any views i put forth are not those of my former employer The Insolvency Service and do not constitute professional advice, you should always seek professional advice before entering insolvency proceedings.
  • Hi Both,

    The car was £13K, RRP however I pay interest on the car so in total approx £15k.
    My balance now is £10K with a settlement of £9K (approx). I pay £222 pm.
    What does it mean by 'equity' in the car. Sorry a bit unsure.

    Thanks
  • dojoman
    dojoman Posts: 12,027 Forumite
    Equity means any amount left over after paying off the final amount.
    ie, if car is worth £12000 and amount owing is £10000, then there is £2000 equity in the car..
    Also as Debtinfo said, would you be able to afford the £222 a month if you went BR?
    :pB&SC No. 298
    Life`s Tragedy is that we get OLD too soon
    and WISE too late!
  • Thanks Again.
    If I went BR, the HP would not be a problem, as all other debts may be written off.
    Thanks for your help again I think I'm getting a better picture now to what the gentleman I spoke to earlier said. I'll just have to wait and see what happens.
  • gazesque wrote: »
    Thanks Again.
    If I went BR, the HP would not be a problem, as all other debts may be written off.

    Hi, this is the next tricky bit...if you do get to keep the car, the OR may not allow the monthly payments as essential expenditure (even if you need the car for work) when calculating your surplus income and how much you are able to pay back to your creditors via an IPA.
  • debtinfo
    debtinfo Posts: 7,012 Forumite
    This is an example with made up figures.

    Imagine your income is £2000pm
    Your essential outgoings are £1500pm not including the car payment.
    The OR says that the car payment is not counted as essential expenditure and must be paid out of your surplus. the car payment is £222pm

    All looks good so far as the surplus is £500pm, easily enough.
    The OR will ask you to pay an IPA (in this case) at 70% which equates to £350pm

    This leaves you £150pm for your surplus and so you can no longer afford the £222pm car payment.

    this is of course just a theoretical example to illustrate the point
    Hi, im Debtinfo, i am an ex insolvency examiner and over the years have personally dealt with thousands of bankruptcy cases.
    Please note that any views i put forth are not those of my former employer The Insolvency Service and do not constitute professional advice, you should always seek professional advice before entering insolvency proceedings.
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