Selling car to dad to pay for bankruptcy fees...

watcher27

The CCCS has advised us to go bankrupt which is detailed in another thread.
But one of the main problems is with the car's. We have too which ARE needed.

My father has offered to pay our fee's, but the chap from CCCS thought one option would be to "sell" my car to my dad for the sum of £1400 (pretty much what its worth) for the fees, but then i remain the registered keeper and user of it.
He wasnt sure wether this would get me in trouble though so thought i better ask if anyone has any extra info on this?

tigerfeet2006

As long as you sell it for what it is worth and not at a discount then you should have no problems. Make sure you have a strong paper trail and it is clear he has paid you the money and is the true owner of the car and you are borrowing it.

watcher27

tigerfeet2006 wrote: »

As long as you sell it for what it is worth and not at a discount then you should have no problems. Make sure you have a strong paper trail and it is clear he has paid you the money and is the true owner of the car and you are borrowing it.

Thanks for that!
Although its a shame its necessary, but we cannot take the risk that one of the car's is taken

I mean, do they take into account the running cost's of specific & practicalities of vehicle's when making judgement?
Our situation is this:
I travel 35 miles to work everyday, which is a 70 mile round trip daily. But i drive a smart CDi and it only cost's me £27 a week in fuel. Public trasport would be around £23 DAILY for me to get to work & back :eek:
Now, my car is only a 2 seater, so no good as the family car. which means out of the 2 cars we have (the other a 02 reg Ford Focus TDCI) would they take into account the fuel economy & number of seats etc before telling us which one to sell?
Sorry, not very good at explaining things

NeverAgain_2

If you proceed with the arrangement, it would be wise to inform you insurance company, or at least check the declarations you made on the proposal.

It may be you said you were the owner and the registered keeper, in which case the change should be notified.

I don't anticipate any problems or premium adjustments, but insurance companies are known to use any means they can to wriggle out of paying a claim.

JimmyTheWig

I don't know, but I would have thought that they would say that you have access to a car (i.e. are the registered keeper of your dad's car) and so you don't need the other car which you could sell to help settle debts.

You have explained why it makes financial sense for you to use a car to get to work and back. As getting to work is pretty fundamental, I'd like to think that they'd agree you should keep that car.
Have you got similar reasons for needing the second car?

NeverAgain_2

There are rules for cars in bankruptcy, but other threads indicate the interpretation of those rules is very variable.

I agree with Jimmy (above), keeping one car is a reasonable expectation, but trying to keep two might be a bit ambitious.

Ineedaname

Going to play devil's advocate here. Would the OR not see this as disposing of an asset, especially as the car is valued over £1k? I'm just concerned they might want some of the money, even though the OP clearly won't have it as they will have used it to go BR.

Also, is the car actually worth only £1400? Or are you selling it at way under value just to get enough money for the BR fees?

IF

I know it is frowned upon by some OR's but they equally know using credit is often the only way 'many' people can pay their fees.


Also a useful thread to read using existing credit towards BR fees:- Click here


If...x

Ineedaname

But this isn't about using credit to pay fees, the OP is disposing of an asset.

OK, the OR may have exempted both cars, but might also have wanted the OP to buy back the BI in the Smart car as valued over £1k.

So my concern is whether the OR would want some cash from the sale anyway.

I also asked about the true value of the car. I've checked on AutoTrader for the entire country but the lowest I saw was £1450 for 1999-2001 model Smart cars. Hence wondering if the OP is selling the car under value to gain just enough (exactly £1400) for two people to go BR.

I wonder how happy an OR would be if an asset was sold under value just before petitioning for BR.

dojoman

Without actually seeing the car it is very hard to ascertain what its exact value is. As long as it is not sold massively under value the OR will not have a problem with it. If the OR was to take it as an asset, by the time they had paid the agents fees, auctions fees they would be very lucky to get half of the £1400 if that in fact is what it is worth. Whether both cars will actually be allowed is also open to question as the OP does not state whether they are both needed for work.

OP are you both going BR? and if so are both cars needed for work by you and your partner?

Ineedaname

dojoman wrote: »

If the OR was to take it as an asset, by the time they had paid the agents fees, auctions fees they would be very lucky to get half of the £1400 if that in fact is what it is worth.

But they would get some money out of taking the car, hence the possibility (if the car is exempted) of offering the BR to purchase the BI in the car so the OR gets some money with less effort.

So my concern still stands that the OR may want some money from the disposal of an asset.

Scenario 1 - if the OP was able to raise the BR fees without selling the car. The OR exempts both vehicles (i'll assume the second car is under 1k value) but as the Smart car is valued over £1k they offer the BR to purchase the BI in the vehicle.

Scenario 2 - if the OP sells the car in order to raise the BR fees. The OR agrees both the OP and spouse require a vehicle, exempts the spouse's car (again assuming value under £1k) and gives the OP allowances for vehicle use. BUT the OR also then wants £400 as the difference between an exempt vehicle value and the amount the OP raised by disposing of an asset.

Someone please tell me if this is a possibility or I'm talking out my backside and the OR wouldn't care that a vehicle worth more than the exempt value was sold just before BR?