DRO and Self Employment question

Crisp_£_note

Hi

Hoping someone can help. Hubby is applying for a DRO he is currently Self Employed and his van is essential to his work as he is a mobile valeter.

His van was an insurance 'write off' a year or so ago. But they gave the van back to hubby and he managed to use some of the claim money to repair it and it's been back on the road (legaly and insured) since the accident.

The van is registered as a write off as we checked but the re-sale value is listed as up to £2,500 still, but advised to take off 30 % for a real estimate.

This is where we are confused as it could be considered an asset worth over the £1,000 DRO allowance limit. However it is a vital 'tool of his trade' and if taken away he would not be able to work.

Where do we stand with this and his DRO application ? Any one been in similar circumstances or have more experience who can advise please ?


Many thanks

fatbelly

As I see it, if he owns it, it either comes under 'tools of trade' or 'motor vehicle' in a DRO application.

Either way it breaches the asset value limit (£300/£1000) and therefore points to bankruptcy as the appropriate insolvency tool rather than a DRO.

Cars are not taken away under a DRO. The application would just be turned down.

You say he 'is applying for a DRO'. What does his Approved Intermediary say about it?

Crisp_£_note

fatbelly wrote: »

As I see it, if he owns it, it either comes under 'tools of trade' or 'motor vehicle' in a DRO application.

Either way it breaches the asset value limit (£300/£1000) and therefore points to bankruptcy as the appropriate insolvency tool rather than a DRO.

Cars are not taken away under a DRO. The application would just be turned down.

You say he 'is applying for a DRO'. What does his Approved Intermediary say about it?

He has only taken advice from Business Debt Line at the moment and this is one question we need to ask them tomorrow before signing and sending the I & E forms etc back to them as we thought the van was worthless and worth less than the £1,000.

Another thought on it is the van wasn't actualy purchesed by him but his mother so he could be seen as not in ownership of it (but more of a rental) except it is registered in his name as he has to be insured to drive it. But I dont think this will make much difference to the DRO ?

fatbelly

Crisp_£_note wrote: »

Another thought on it is the van wasn't actualy purchesed by him but his mother so he could be seen as not in ownership of it (but more of a rental) except it is registered in his name as he has to be insured to drive it. But I dont think this will make much difference to the DRO ?

The registered keeper is not necessarily the owner.

If someone buys a car and just allows a relative to use it, then there's an argument for saying it still belongs to the purchaser.

But in this case, with a van and an insurance claim already, I think it's not an argument likely to hold much water.

You do need to run this past Business Debtline. They've probably had experience of this sort of situation.

Crisp_£_note

I will thanks for the help.

Crisp_£_note

Just an update about the van ....

Hubby took it to a local popular second hand van trader / dealer to ask for a valuation and they said they valued it at roughly £2,200 but because it is a 'category D' (light damage total loss by insurers so therefore a 'write off') they couldnt put a value on it for resale and wouldn't take it off hubby if he were going to sell it.

The salesman suggested that hubby would have the same problems anywhere and his only solution was to sell it privately, but even then he would still only get what people are willing to pay for it and given the information of the history of the van not many would pay more than £1,000 (probably less) for it.

With this new info in mind what are the chances of hubby being accepted for a DRO ? Our only vehicle is the van and as I said previously without it hubby would be jobless as he is Self Employed.

Thanks

fatbelly

Well this is what the guidance says. I'll leave you and your intermediary to work out what to do with it:

Valuations of cars, taking into consideration their age, mileage and condition, can be obtained using the online Parker’s Guide website. Please navigate to this site via the following link:
http://www.parkers.co.uk/cars/prices/

Please note that you should take the debtor’s description as to the condition of the vehicle when deciding which value to use from the guide e.g. Private Good or Private Poor.

This website should be used to verify the debtor’s valuation of their car prior to entering the value of the vehicle on the application form.
It should be noted that the Parkers website only provides free valuations for cars registered from 2000 onwards. Therefore, in the case of older cars, an intermediary is permitted to accept the debtor’s own valuation for the purposes of the application. However, the debtor should be made aware that the Official Receiver may make enquires as to how the valuation was arrived at, and if the Official Receiver determines that a deliberate undervaluing has taken place this may result in the revocation of the DRO and criminal or civil sanctions.