HP Payment SOA

freddy911

Has anyone got any experiance with getting the OR to agree an HP payment for a car as essential? My ex wants to keep her car that cost £117 per month so not exactly excessive, and there is no question as to wether she needs it or not, she's a nurse who works shifts and the hospital where she works is 25 miles from where she lives, public transport is impossible.

She has no spare money to let the car go and buy one outright so she needs to hang onto the one she as on HP either with agreement from the OR or by taking the money from other things.

Has anyone else managed to get the OR to agree car payments?

Thanks

alastairq

7) Vehicles subject to finance agreements

(September 2008)

Generally, where a vehicle is the subject of a finance agreement, the official receiver must consider the type and terms of the finance agreement before deciding on the course of action to take. For further information see Case Help Manual part – Assets Subject to Credit

The terms of any hire purchase, conditional sale or leasing agreement usually gives to the other party to the agreement (referred to hereafter as the hiring owner) the right to terminate the agreement in specified circumstances. These circumstances will usually include the making of a bankruptcy or winding –up order and will generally allow the hiring owner to take back the vehicle.

Where a vehicle is subject to a finance agreement, the official receiver should contact the hiring owner. This contact should be by telephone in the first instance, followed up in writing. The official receiver needs to know the nature of the agreement, the amount outstanding under the agreement and the settlement figure required to conclude the agreement and obtain ownership.

From the value of the vehicle in question, the official receiver can then decide whether there would be any benefit to the estate in realising the vehicle. If there is no equity, the official receiver should inform the hiring owner that he/she does not intend to deal with it and that arrangements should be made to collect it as soon as possible.

Where the value of the vehicle is sufficient to allow for a surplus after settlement of any debt to the hiring owner and payment of the agent’s costs of sale, the official receiver should approach the hiring owner for his consent to a sale by the official receiver. Where the likely equity from such a sale is borderline, the official receiver can come to an agreement that the hiring owner dispose of the vehicle and hold any surplus to the official receiver’s order. Such decisions should only be made by the examiner and any relevant correspondence should be passed to them for consideration as soon as it is received.

No action should be taken by a case officer in this regard without the prior agreement of the examiner.

If a vehicle subject to finance has a cherished/personalised registration mark the official receiver will need to establish whose name is on the registration document for that vehicle. It is the registered keeper of a vehicle that has the right to transfer the registration mark, so where a finance agreement is in place, if the finance company are the registered keeper of the vehicle, they will have acquired the rights to that registration mark.

For more information regarding vehicles subject to finance that have a cherished/personalised registration mark, see TM Chapter 31.2 – Motor Vehicles, paragraph 31.2.15A

The above is a quote from the stickies....

In the case of HP, much will firstly depend on the HP company's rules regarding BR?

They may view BR adversely, and the car will be taken back.

There may also be an issue regarding the 'value' of the car?

This would apply, regardless of whether your EX obtains an exemption for the car from the estate, or not.

I take it your EX has yet to petition BR?

If this is the case, she needs to establish whether the HP company would be happy to continue with the contract following BR.

Also, she needs to establish the value of the car....?

How long has the contract left to run?

If it's value exceeds the suggested £2000-approx cut-off under the IS rules,the OR may take the view that the HP payments are excessive, and not allow them as expenditure?

Flyright

Who is actually paying monthly payment? If it's being paid out of the OP's bank account (on behalf of the OP's ex) then I can't imagine the OR will allow the payment at all as reasonable expenditure (assuming it is OP going bankrupt rather than the ex).

freddy911

The HP company say they dont care as long as payments are upto date, the payments are made from her bank account, and its her going BR tmrw, the car is worth 3200 according to parkers but settlement on finance is £3500 so no equity to release. 2 and half years left on the agreement.

Thanks

Flyright

Ok, but am I right in thinking that the HP is actually in your name? I'm not sure that the OR would allow your ex to continue making payment on a debt that isn't legally due to your ex to pay (it could be considered that your ex is favouring you by making such payments on your behalf). Your ex will need to declare to the OR that the HP agreement is not in their name but the OR may well not allow the payments to continue.

I'm a bit confused though..did you declare the HP agreement in your own bankrupcy? If so, did you tell the OR that the payments were being made by your ex?

freddy911

I see what your saying about her favouring me, but its not quite like that, in the sence of me being an unsecured creditor of hers. An HP agreement is a secured debt and even though the debt is in my name the money is owed to the HP company who have a charge over the car she wants to keep. Its a very complex (messy) case. I suppose theres only one way we will find out how the OR views this, I've put it down in her SOA well just have to see what they say about it. I also listed the car on my SOA as well and tried to explain the situation on the phone to my OR, so theres 2 OR's who may have an interest in it.

Emmylou_2

I was allowed to keep my car - it's in joint names with my best mate/housemate; in effect in "negative equity" and I have a disability so need the car to be able to get round (using public transport/walking isn't really an option with ME). The HP firm were OK about it, as long as the payment is made each month.