Bankruptcy car question please

sickasadog_2

Hi all

This is something we have considered for a while and after 6 years of making token payments and feeling physically ill wilth worry we have realised this is something we need to do.

Can anyone clarify a situation please? We currently have a car that my mother in law got a loan for as our last car had to be scrapped as it wasnt worth having the repairs done and we couldnt afford it. the car is registered to my husband as keeper but we pay the installments to mil.

She is prepared to have the car and pay the installments and allow us to use it as we need it.

Would the OR want this car to be included towards our debts or not with her getting the loan for it. We are happy to hand it over to her as she needs a car anyway so would suit both of us.

If they would allow her to keep it, would we be allowed an allowance for insurance for when we need to use it and to pay for the fuel we use?

Thanks a lot!

PippaGirl_2

How much is the car worth?

You are generally allowed a vehicle (if needed) up to the value of £1000 if it is worth more the OR will usually take it, sell it and allow you £1000 to buy a cheaper vehicle.

PippaGirl_2

Unfortunately the fact that your mother has lent you the money for the car is irrelevant to it really, your debt to her should be listed along with the other debts on your forms. You will not be allowed to make any payments to her to pay off that debt as part of your expenditure, though if you choose to reimburse her at some later stage that is up to you.

Rochdale_Guy

Hi, sorry for thread stealing.

I owe £27,000 and am on a Debt Management Plan (DMP) with CCCS. I pay them £127 a month and have a debt free fate of 2030, yes, 2030 :mad:

I have a 2004 Ford Fiesta and still owed £2,500 to Northern Rock for their bank loan, when I was accepted onto the DMP.

I too am seriously considering bankruptcy as I cannot live as I am like this until 2030.

My car is worth around £2,200 tops and has done 45,000 miles.
I have had it since April 2007.

Can you really not keep a car if going bankrupt?

I don't drive to work everyday in it, but I use it a lot to take family to regular appointments (hospital and medical ones).

I may also may be made redundant in September 2012 and would need a car to look for othr jobs / commute to any new job I may get.

Why cannot I keep the car please?

Anyone else who has been through this please reply.

Thankyou

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Rochdale_Guy

Thank you so much. I didn't really understand that 100% but its a light in an otherwise very long tunnel..... 18 year tunnel in fact.

How can I get a valuation on a 5 door 2004 plate FORD Fiesta 1.4LX automatic please? 45,000 miles on the clock. I'm pretty sure of the original £7k car loan with Northern Rock from April 2007, I did only owe them £2,500 before I started the CCCS DMP. They happily accept the CCCS payment offer by the way and have frozen interest. Who owns the car, Northern Rock or me? I am a bit thick, sorry....

Rochdale_Guy

Ooops, just checked, I still owe them £2,826.41 - so yes, the amount owed is more than it's worth.

Mouse1812

Back to the original question - which was actually worded very well

“We currently have a car” (I note you do not say own; that could be “we currently have use of a car”)
“that mother in law got a loan for” (I trust that is: she got a loan to buy a car - not a loan to lend to you)
“The car is registered to my husband as keeper” (Keeper, Not Owner! And correctly so as he is the keeper)
“we pay the installment to mil” (which if she is the owner is nothing more than a hire charge)

Ownership is key and if you can show that the ownership is with mil and not you then the OR will have no claim on the car. Who actually bought the car? And if it was mil did she actually gift it to you? - treat those as rhetorical questions for now.

The OR can only take assets which belong to you, they may check ownership of assets which you have use of and you perhaps need to find some appropriate evidence. I would suggest discussing the ownership question with mil to clarify her understanding of the arrangement. Things are so often unspecified between family members.

PippaGirl_2

Mouse, they have been making the payments for the loan which is in effect buying the car. I think honesty is the best policy.

Mouse1812

Nope Pippa, don't jump to conclusions, that's not what the OP said. They have been paying mil, just because the amount is the same it is not the same as paying the finance company. I'm not suggesting anything dishonest, I'm suggesting the facts should be cross examined.

PippaGirl_2

Ok, yes no worries, tell the OR the truth, that's what is important. If the mother can prove she took the loan out for the car, made the payment herself and she paid any deposit for it too then as you say it may be ok. The BR forms have clear questions on vehicles inclouding questions on ownership, plus do you have the use of other cars etc. so it should be easy to explain there.

Rochdale_Guy

JonathanH wrote: »

If you owe more on the car loan than the car is worth then you can usually negotiate with the OR or Trustee, as you are allowed a car and they don't want any avoidable negative equity adding to your bankruptcy.

Hi JonathanH.

Sorry, I have gone things mixed up in my original post.

I took out a bank loan with Northern Rock for £7,000 - it was NOT a car loan.
They loaned me the money, I bought the car at the garage on my bank account debit card after getting authorisation from my then bank.

So, the car is mine.

I have been paying back Northern Rock each month my direct debit, until I went on the Debt Management Plan with CCCS.
CCCS now pay Northern Rock a pyment each month. Northern Rock were happy to accept this reduced payment and don't charge any interest on the CCCS payment.

Does the whole negative equity thing still stand as the car is mine, it was NOT a car loan?

Thanks.