The DI Bankruptcy School

debtinfo

Yes, the title is a bit self indulgent . Maybe i shoud have gone for the technical question chat club but that didnt quite have the ring to it.

Anyway, what i intend to do with this thread is to help the helpers, i often see threads where people give a basic and correct answer but get a bit stuck on the details and as we quite often see a small detail in someones circunstances can sometimes completely change the answer to the question.

with this in mind i am going to try and take one topic at a time and take questions, and pose some myself for people to have a go at and hopefully increase their own knowledge so that they can help others. All are welcome to post and there are no wrong answers, well actually there are :rotfl:but best to get it wrong here so you can give good info out to the people who need it.

Question 1 coming up

debtinfo

ok here goes

can anyone name me as many possible outcomes to what might happen to your car in bankruptcy, basics first, and then we can explore the nuances later

Ineedaname

Brilliant idea DI. I'll start the ball rolling.

Exemption by the OR and retention for use, with usage allowances
Exemption by the OR as above, but taken by the HP company!
Taken by the OR to realise the proceeds of the asset

I know there's more but I've just got up from resting on the sofa!

JCS1

I know I'm at an advantage with this (!), but cars on HP can be confusing. So my understanding is:

If car is on HP, OR will determine value of car along with amount of finance outstanding. If there is equity in the vehicle, the OR has the option to adopt the agreement, clear the finance, and then sell the vehicle as an asset.

If the finance outstanding is higher than the value of the car, then the OR will send a letter of non-adoption to the HP company, and it is then down to the HP company to decide what to do with the vehicle.


Vehicle can also be exempted as a tool of trade, and some taxi's under local authority rules have to have certain age, etc, of car. So in these cases the value may be higher than "normally allowed".

debtinfo

yep any more

dojoman

Great idea DI, much appreciated

Be allowed to keep the car, and possibly buy back the BI from the OR depending on the value.

tigerfeet2006

If the car is SORN'd then the OR will take it even if it is only worth scrap price.

If you cannot prove a need for it or you employment is within walking or public transport distance and it is resonable to travel by public transport then the OR will have an interest in the car.

IF

Good idea DI and I can't think of any more!! :think:

Braynes

Bankrupt has valid grounds for claiming vehicle is exempt, but the car is worth a few bob to the estate in which casse the OR can sell and provide a cheaper replacement (or funds for a cheaper replacement).

debtinfo

I think that pretty much covers most of them, to tidy it up a bit i would clasify them into 3 main groups,

1) the car is exemptable
2) the car is not exemptable
3) the HP special case

following that into subgroups

1a) there is a reason for exemption and the car is of a low enough value to be exempted outright
1b) there is a reason for exemption and the car is too expensive so OR sells the car and provides replacement or funds for replacement
1c) there is a reason for exemption and the car is too expensive so OR asks Bankrupt/friend/family to pay the difference or offer for difference

2) no reason for exemption
a) OR asks bankrupt/friend/family to buy the car back or make an offer to buy car
b) OR uplifts car and sells it
c) OR scraps car (you may ask why, they can get this done for free and when the car transfers to them at the bankruptcy date the OR is then responsible for it so may need to do something if their is no alternative)

3) car on HP
value of car minus remaining HP = equity
a) equity of car is negative - the OR can Not Adopt the agreement leaving it to the finance company
b) equity is positive but there is an exempt reason
bi) equity of reasonable value then simple exemption takes place and Not adopt agreement
bii) equity of excessive value - take car adopt agreement, sell car, pay finance, give amount back to bankrupt, keep the rest
or) equity of excessive value - ask bankrupt/friend/family to pay difference of make offer for difference between reasonable amount and equity amount, once received, not adopt agreement and exmpt car
c) equity is positive but no exempt reason
i) adopt agreement and sell car and pay finance
ii) ask bankrupt/friend/family to pay difference and then not adopt agreement



As you can see when i often say, it depends on the circumstances, im not joking:D

so next question

exemptable reasons, as many reasons as possible why an exemption may be granted?

Ineedaname

DI - perhaps we can have a sticky with your summary posts in once you've done a few?

Reasons for exemption:

Needed for work
Disabled person/child in the family - not necessarily a disability car, just a need for transporting the disabled person
Motability Scheme car - the BR doesn't actually own it but because it's a disability related HP type agreement the OP will exempt and the HP will not cease.
BR lives in a rural location and/or one without reasonable public transport and can prove a need for general use
A need to attend regular medical appointments - again without reasonable public transport

I'm sure there's loads more but that's my lot for now.