Keeping Cars after Bankrupt

freddy911

Me and my soon to be ex wife are facing going bankrupt over approx 70k of debts. We both have cars on finance, is there any likelihood they will allow us both to keep a car? My wife works as a nurse and lives 20 miles away from work, public transport is not an option due to the hours she works and also needs it for getting kids to school. I'm not too bothered weather I keep mine or not but would proffer to as I live and work 50 miles away from the kids and sometimes need to have them during the week and take them to school the following day when my wife is at work, this would be impossible without a car. Both cars are financed in my name, but both are worth considerably less than what is owed on them so there wouldn't be any gain in repossession and we could both easily meet the costs of repayment from our salaries. Any opinions welcome.

Thanks

JCS1

How much are the cars worth? How much is the amount outstanding? And is the finance a loan or HP?

haremscarem

It all depends, the most common out come is they will take the most expensive. When they are financed it becomes a little trickier if they are less than what is owed. They may just allow you to deal with the finance company and continue paying for them, but this money would have to come from any excess you have per month, which is something you will unlikely to be allowed if an IPA is in place.

You will be allowed one car, but they could take both, settle the finance if it's viable and then allow you to buy a car of basic value, £2,000.

I think you will have to wait and see what the official receiver says on the day of your interview and thereafter.

JCS1

It depends on the type of finance though. if an unsecured loan, then the loan goes into the BR and the cars are assets to be dealt with.

If HP, it depends on the values of the car and the amount outstanding as to what is likely to happen.

freddy911

Both are HP, one is worth about £3500 with £4500 outstanding, the other is worth about £6000 with £10000 on the finnance.

JCS1

In that case, the OR will send a letter of non-adopt to the HP company (just to say they will not be taking over the HP agreement and have no interest in the vehucles) . It is then up to the HP company to decide what to do, some will let you keep paying, some will take the cars back. Might be worth checking the agreement in case it contains a BR clause.

debtinfo

The problem is going to be that the OR will not allow the payments as an expense, which effectively means you wont be able to keep them

freddy911

But if we have enough from the portion of excess income they allow us to keep, they will allow it?

dojoman

srichar3 wrote: »

But if we have enough from the portion of excess income they allow us to keep, they will allow it?

If you have £20 or more excess, then the OR will take that from you for 3 years anyway.

stuart30

Opps wrong info.

debtinfo

srichar3 wrote: »

But if we have enough from the portion of excess income they allow us to keep, they will allow it?

It used to be that you were allowed to keep more excess income and so people could keep up thir HP agreements, but whilst not impossible is very much more difficult now more of your income is taken. The exceptions might be some one with income only from benefits as this is not taken or perhaps someone with a none bankrupt partner that earns much more than them