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

Rochdale_Guy

tigerfeet2006 wrote: »

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

I've actually read on here and other forums that there have been cases where people have had a car valued at less than £1,000 and been forced to sell it, that's awful and scary.

It all comes down to proving you need a car.

alastairq

I've actually read on here and other forums that there have been cases where people have had a car valued at less than £1,000 and been forced to sell it, that's awful and scary.

I don't know why that fact should be 'awful & scary?'

As the IS publications clearly state..[and the publications contain vital information that every intending BR should be aware of]..................a car is considered an asset.

When someone petitions for BR, surely they must be aware that they are handing over control of all their assets to the Receiver?

Every scrap of material or financial wealth ceases to belong to the BR when the Court stamps the petition.

That includes, all belongings, and the shirt on their back!


The above is an angle, a 'viewpoint', which many seem reluctant or unable to comprehend when entering into BR.


In reality, the OR then allows the BR to 'retain' [as in, the OR has no interest]....items of a domestic nature, and sufficient of their income to meet reasonable domestic needs.

Anything material of significant value [for example, single items valued at over £1000], or which is not essential for reasonable domestic needs, goes into the BR estate.


Which includes cars/vehicles....whatever their value....or condition.

However, regarding vehicles, at some point the OR becomes legally responsible for the vehicle, and it's condition. This is recognised in the publications,with details of undertakings the BR has to make in this respect]

Cars, especially these days, can have significant scrap value.

We must remember, the OR has a duty to realise all assets to the benefit of creditors..they come first.

The OR has to determine whether the realisation of an asset will deliver a benefit....or not?

If not, then the OR relinquishes their interest.


IMHO, the confusion and frustration BR individuals suffer in these mattes stems largely from assumption, misreading, or not reading at all, the information relevant to their state.

Luckily for those on this forum, many who proffer advice and support do attempt to try to take the 'sting' out of the reality.

But, if the reality is not properly understood, then assumption and supposition rear their ugly heads.

Rochdale_Guy

Thanks.

Looks like I'm in this for the long haul then as I am not losing my car.

I'll be made redundant soon, then the creditors can whistle for any more money out of me. They can have £1 a month and I'll take it from there :mad:

Rochdale_Guy

Even if I sold it, and bought a jalopy for £500, they can still take it then?

What is the point....

kation

If you can prove to the OR (to their satisfaction at least) you need a car then they will allow you an amount on your SOA for a car.

The OR has guidelines with respect to car values. If your car is worth £2000, then the OR might well do one of the following:
a) ask you to purchase the BI (beneficial interest) in the car for £1000 (£2000-£1000).
b) ask you to sell it and pay the OR the difference between the sale price and a £1000 (leaving you £1000 to buy another car).
c) arrange to have the car seized and return £1000 to you when it is sold.
d) do nothing (if they think they might not get enough to bother with), or they are one of the 'kinder' variety of OR that do seem to be out there.

However - If you acquired a £500 'jalopy' during bankruptcy AND the OR refused you an allowance for a car, then they could well seize the car (it would be an 'asset during bankruptcy'). Most get round this by having a friend or family member own the car, with the BR being the 'registered keeper'.

As far as creditors 'whistling' for the money - you don't get a say in that. If the OR deemed there to be a surplus on your SOA then they would request you sign an IPA, if you refused they could/would seek an IPO, and if you just ignored them they would suspend your discharge indefinatley (see Kerry Katona...)

Rochdale_Guy

kation wrote: »

If you can prove to the OR (to their satisfaction at least) you need a car then they will allow you an amount on your SOA for a car.

The OR has guidelines with respect to car values. If your car is worth £2000, then the OR might well do one of the following:
a) ask you to purchase the BI (beneficial interest) in the car for £1000 (£2000-£1000).

Can't do that, I owe £26k and certainly haven't got £1k free

kation wrote: »

b) ask you to sell it and pay the OR the difference between the sale price and a £1000 (leaving you £1000 to buy another car).

Ask you? Not order you?

kation wrote: »

c) arrange to have the car seized and return £1000 to you when it is sold.

Over my dead body.

kation wrote: »

d) do nothing (if they think they might not get enough to bother with), or they are one of the 'kinder' variety of OR that do seem to be out there.

Oh I won't get one of them, I just know it

kation wrote: »

However - If you acquired a £500 'jalopy' during bankruptcy AND the OR refused you an allowance for a car, then they could well seize the car (it would be an 'asset during bankruptcy'). Most get round this by having a friend or family member own the car, with the BR being the 'registered keeper'.

So I sell my treasured car, then get a £500 jalopy. Then they can seize that :mad:

What incentive is there for me to go bankrupt?

kation wrote: »

As far as creditors 'whistling' for the money - you don't get a say in that. If the OR deemed there to be a surplus on your SOA then they would request you sign an IPA, if you refused they could/would seek an IPO, and if you just ignored them they would suspend your discharge indefinatley (see Kerry Katona...)

Thanks, yeah but only if I go bankrupt or apply to.

Thank you for the helpful post.

marliepanda

Why do you think you should get to keep a 'fancy' car when you owe so much money?

Rochdale_Guy

It's not a fancy car, it's a 2004 Ford Fiesta

marliepanda

Rochdale_Guy wrote: »

It's not a fancy car, it's a 2004 Ford Fiesta

Well its still fancier than the 'jalopy'

You speak about 'incentives' to go bankrupt, why would there be an incentive?

You are asking people to write off large amounts of debt, so no, they wont let you keep a 'fancy' car.

marliepanda

Rochdale_Guy wrote: »

So I'll stick with my Debt Management Plan that would have lasted until 2030 @ £126 a month, but hang on, I'm being made redundant soon.

I am not saying its not a crappy situation to be in, but if you are forced down the bankruptcy path surely you realise why they won't let you keep a car worth in excess of what they think is necessary. You can get cars cheaper than £1000, so they are hardly forcing you into a clapped out banger.