Keeping a car worth £2k and going bankrupt? £2,800 is still owed on the car...

Rochdale_Guy

(Cut and paste from another similar thread on here so I have made my own as to not offend and confuse!)

Hi,

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 £2,800 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 can't I keep the car please?

Anyone else who has been through this..... please reply.

Thankyou

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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.

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 £2,800 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

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

Rochdale_Guy

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 had been paying back Northern Rock £106 a 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.

bankhater_1965

if you only pay £127 a month towards your debts why do u have to file for bankrupcy ?? is it because you are eager to get straight and build another debt up again !

Rochdale_Guy

bankhater_1965 wrote: »

if you only pay £127 a month towards your debts why do u have to file for bankrupcy ?? is it because you are eager to get straight and build another debt up again !

Only pay £127 a month towards my debts? ONLY......

I can't even afford that much now my rent has gone up.

I did an SOA and completed the CCCS Debt Remedy Plan online, they suggested bankruptcy or a DMP, which I took.

Of course I want to get straight and pay back most of what I owe, but I will be on this DMP until 2030

I will *NEVER* run up debts ever again...

skylight

There is no reason why you cannot KEEP the car.

It is not on a car loan or HP - therefore the creditor cannot take it back and the debt will go into your BR.

Its up to the OR as to whether or not you can keep the car. Find a proper valuation checking the condition and everything and list your good reasons for keeping the car.
1) You NEED it for work. (not sometimes, you NEED it).
2) You NEED the car for hopsital appointments and others rely on you for this.
3) Do your sums to prove that bus pass/taxis for shopping etc will cost more than running your little car.

Don't mention the posibility of redundancy. Don't give the OR that sort of info - they can only work on facts, and the fact is you currently have a job.

You don't need to sell the car to someone else. A low value car and a job means 9 times out of 10 the OR won't care.

DISCLAIMER - As with everything BR, you can never second guess what your OR will do on the day. But make sure you have a good arguement to back you up.

Rochdale_Guy

Thank you skylight

PippaGirl_2

if the OR does decide you need a car, the problem here will be its value as they generally allow £1000 for a car so they may want it sold and take any money over the thousand towards paying your creditors - you can then buy a new car with the thousand. What is still left on the loan is irrelevant as it will go into the BR

Rochdale_Guy

I still think I look like I'm screwed

tigerfeet2006

As skylight says you have to prove a need for a car. If you can do that then you usually have a limit of a £1k on vehicles.

Now you have three options:
1) you sell the car for it's true value and buy a car for £1k and put any money left towards paying for your BR.

2) if the OR allows you to keep the car then you ask some one to help you out and they give you the money to pay the OR the difference between £1k and what it is worth.

3) if the OR let's you have a car then he takes yours, sells it and gives you some towards a new car.

Option 1 is a very good option in your circumstances