DRO and Car asset.

SamuelJ_3

Hello all,

I'm just researching in applying for a DRO or other debt relief.

I currently have a car on what I was thought HP but it turns out its a Fixed Sum arrangement which has ~£6000 left to pay on it, and a credit card maxed out at £989.

I've recently gone back into full time education in college (so I'm not eligible for a student loan) and cannot afford the repayments at all as my income is £120 from a ALG (similar to 16-18 EMA grant).

Expenditure wise.. £165 on the car loan, £27 credit card minimum payments. £80 travel (diesel+parking) £30 mobile phone, and then any spare change I can get a hold of feeds me during the day while at college.

How am I coping to even make the payments? My mother is subbing me the money which I owe but don't have and I'm getting her into debt which is really unfair on her and the family, which I'm very guilty for, It can be anywhere in the region of £200 a month shes lending me which I cant pay back at all.

Now down to the question thats bugging me at the moment... I use my car for travel to and from college (20mile round trip), having a social life, and seeing my little lad when I can visit.. the car is worth approx 2850 on parkers so its well over the £1000 DRO limit.

I am considering getting a small 50cc/125cc commuter bike which is cheaper to insure, run, tax and park than my current car! (ALOT cheaper) I was advised by the national debt line that I could sell my car for its market value (or as much as I can get for it), use the money to get the bike/insure/tax and the remaining money from the sale to go to my two debts (not buying any luxurys, just the essential for transport).

If I did that I'd apparently still be able to claim the DRO? since I've lost the £2800 car asset and replaced it with something under the limit and shown no preference to either debt, but I'm not entirely sure if I it works like that... I feel my own transport is needed for my independence and day to day living! I've had most of the family say I should get the bus like other people or just have no transport at all..

Anyway, has anyone been in a similar situation or can anyone advise me on this?

Thanks

Samuel

SamuelJ_3

Its also just come to my attention as well that my contract phone may be effected once the DRO is (if it is) awarded, would I lose my phone contract?

kakanodebt

as long as you sell the car at market value and not at lower price you should be ok. If you sell it cheaper it could be seen as a transaction at undervalue.

SamuelJ_3

I'd of course want to get as much money for the motor as possible!

Just as long as it would be okay to get replacement transport with the money from the sale. I'd need to get the bike, insure it, possibly tax it, and then all essential gear, such as waterproofs, helmet etc. I wouldnt go for the flash expensive kit, just the bare minimum.

and then any left over money would go to the two creditors pro rota (after attempting a final settlement with my largest debt)

I'm obviously not too chuffed about claiming DRO and being on the insolvency list buy I suppose its the price one has to pay for previous stupidity! :-)

a.j.m_2

Hi there, could I ask what did you do SamuelJ, as I am in the same situation, I would like to sell my car and get a smaller one but also get a DRO as unfortunatley if I have a car which is over £1000 (it actually worth approx £2500) I cannot get a DRO but I do need a car to get to work, can anybody advise me? Otherwise my option is to go bankrupt and they would take the car anyway.
Regards
ajm