Bankruptcy car question please

Rochdale_Guy

(apologies to sickasadog)

mum2one

Rochdale_Guy wrote: »

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.

even thou u used the money to buy the car it would be classed as a personal loan not a car loan, - as for the value of the car have a look at local papers, and do internet searches for cars of similar age, milegae etc this would give u a rough ide of what the car is worth. At a guess if the car is 2004 model at a guess it would be around the 1k mark, x

Rochdale_Guy

Thanks mum2one

sickasadog_2

Mouse1812 wrote: »

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.

Thanks Mouse

I wont be avoiding anything on the forms Pippa, I too believe honesty is key so would like to just have the advice on what the effects will be on the car.

Mouse in answer to your points (which I thank you for) my mil went to the bank with my husband and advised she wanted a loan to buy a car. The understanding is we have to pay the installments as shes retired and lost our fil not long ago so we didnt want to default on them.

I understand there is a risk the OR would want the car but MIL also needs to replace her car and she has said that if allowed she would take the car back and pay the installments herself and allow us to use the car. As it stood we were both on the understanding the car belonged to her until it was paid in full. As it stands it would be better for us and her if she could have the car back. Would this be an option? The car was £10500 which she got the loan for and withdrew and gave to my husband which was bought the following day.

the loan on it still stands at 8500.

If we are allowed to hand it back to her she has said we could pay to be added to her insurance to use it as husband does college and we need it for shopping once a week. If it comes down to we cant we can use public transport but infact it would be cheaper to add husband to her policy and just pay for that and the small amount of fuel we use. Between insurance for his own policy and the loan payment it would actually give us £350 extra towards our living expenses/creditors.

Any further opinion would be appreciated. Thanks

JCS1

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.

Just to clarify - if it was an unsecured loan, then the loan goes into the bankruptcy and it is up to the OR to decide what to do with the asset.

If a car is on HP, and assuming what is owed is higher than the value of the car, then the OR will send a letter of non-adopt to the HP company and it is then down to the HP company to decide what to do.

bankhater_1965

if the car is on a personal bank loan not hp , sign the car over to a freind now !!!! that way they cannot take it , always be 1 step ahead

tigerfeet2006

Don't be daft, that willbe seen as disposing of an asset which the OR can get back and then will scrutinise the BR affairs very closely.

PippaGirl_2

Who bought the car? By that I mean at the garage, who's name is on the paperwork?

sickasadog, I think it is one of those situations when you won't know until the OR decides, it will be interesting to hear what they say.

bankhater_1965

tigerfeet2006 wrote: »

Don't be daft, that willbe seen as disposing of an asset which the OR can get back and then will scrutinise the BR affairs very closely.

so are you saying if you sold a car before going bankrupt to say finance your day to day living costs is not allowed ,!! RUBBISH

JCS1

bankhater_1965 wrote: »

if the car is on a personal bank loan not hp , sign the car over to a freind now !!!! that way they cannot take it , always be 1 step ahead

Signing a car over would be seen as disposal of an asset, the case would be marked for further investigation.

bankhater_1965 wrote: »

so are you saying if you sold a car before going bankrupt to say finance your day to day living costs is not allowed ,!! RUBBISH

This is different to what you said first. Selling a car and then accounting to the OR as to what you had done with the funds would (depending on what the money was spent on) be fine. Transferring it over in an attempt to put it out of the OR's reach would not. Don't forget, the OR does DVLA searches as a matter of routine.