some advice needed please

rhubarbarella

Hi there,

I wondered if the good people of this board could offer me some advice please:

My OH will be filing for bankruptcy in the next couple of weeks.
At present he has a car on HP (it is definitely HP and not another form of loan purchase).
This has not been paid for two months, but although the company has sent a few letters about missed payment they have yet to make moves to repossess the car.
My query is basically around this issue. As it stands the HP agreement is a secured debt in my partners name against the house we both own with mortgage. It is therefore my understanding that this debt cannot go into the bankruptcy. However I believe that if the car is repo'd the debt will become unsecured and can therefore be added to the bankruptcy. Is this correct?
If my partner contacts the car people and asks them to repossess the car, can it then be added to the bankruptcy, or do the company themselves have to choose to do it?
If they will not repossess before my OH goes bankrupt, can the debt be added to the Br afterwards, or does it all need to be sorted first? And will he be penalised or not allowed to put the debt into the Br if he asks them to repossess?

I hope that makes sense and you are able to answer my query

(additional info: agreement on HP was to run for 3 years, with a larger one-off payment at the end of the 3 years. currently only 6 months into agreement so only a tiny amount of car value actually paid for at present)

Thank you

dojoman

Is the loan secured against the car or your property?

rhubarbarella

dojoman wrote: »

Is the loan secured against the car or your property?

the HP car loan is secured against the property.

also, for info for people reading this, the HP agreement is one of these all-inclusive deals, where the monthly payment includes tax, service, insurance, breakdown cover etc basically everything except petrol, so even if the car was sold it would not raise enough to meet the obligations over the terms of the agreement

JCS1

What are your plans for the property in BR? As it's secured against the property rather than the car, the debt would not become unsecured if the car is repossessed.

Do you want to try and keep the car and could you afford it?

rhubarbarella

JCS1 wrote: »

What are your plans for the property in BR? As it's secured against the property rather than the car, the debt would not become unsecured if the car is repossessed.

Do you want to try and keep the car and could you afford it?

No, cannot keep the car, it said somewhere that even if you meet repayments if you are BR they'll take it anyway, so obviously stopped making payments.
The debt advisor told us that the debt would become unsecured once the car was repo'd.
Property has only negligible equity (about £1500) so will be keeping the property for now.

JCS1

If it's a normal HP where it's secured against the car, then the debt would become unsecured when it was repossessed and would then go into the BR. But as our car is secured against the property, then the debt will become secured against that instead.

mel12

No, cannot keep the car, it said somewhere that even if you meet repayments if you are BR they'll take it anyway, so obviously stopped making payments.

Whether you can keep a car or not depends on the value of the car and if you need it (for work etc). See this thread for more info
http://forums.moneysavingexpert.com/showthread.html?t=1056247

rhubarbarella

JCS1 wrote: »

If it's a normal HP where it's secured against the car, then the debt would become unsecured when it was repossessed and would then go into the BR. But as our car is secured against the property, then the debt will become secured against that instead.

oh, if thats the normal thing, thats what itll be then. someone on another thread told me it was secured against the house, so I assumed that was normal. To be honest the debt adviser my OH has seen was next to useless, hasn't actually given us a straight answer to anything, so I am just trying to work out what the hell is going on. Added to that my partners severe, worsening mental health and I feel like I am desperately trying to keep my head above the water.

I will re-read all the T&Cs of the car HP agreement tomorrow and see if I can work it out. If the standard thing is to secure it against the car itself then its probably that. if that IS the case, how does it work with regards my query above? thanks

JCS1

If secured against the car, then one the car is repossessed (either voluntarily or by the company deciding to do it) then it will go into the BR (and whether it is before or after the BR date).

When you check the paperwork, just make sure it is in OH name and not in joint names.

mel12

sorry to hear things are so difficult. You could try phoning one of the other debt charities if you're not having much luck with the one you're talking to.

rhubarbarella

OK, have just given myself a headache reading the teensy tiny small print of the car HP agreement.
It doesn't say ANYWHERE in he documents I could find that the HP was secured agianst the house (I actually couldn't find the bit that said it is secured against the car either though)

If it does not say it is secured against the house does that mean it is NOT secured against the house and is only secured against itself??

It does confirm that even if payments are up to date, if you go bankrupt they will repossess the car, so glad we stopped paying for it.

Thanks, looking forward to your response