BR wonderings (delaying the event & scrapped car snag ?)

simon78

Hello people, for many years I have struggled with debt problems, a mix of bad decisions, sub-prime borrowing, personal circumstances and robbing Peter to pay Paul have got me to the position I am in today, some £44k in debt with no real hope of paying the creditors.

Up to 2008 I worked & earned well, in early 2008 my wayward daughter was sent to live with me, I became a single parent & had to cut my working hours by half, the income lost was not replaced by child related benefits so debt started to mount as I was unable to pay all but the priority debts.

In 2010 it was a case almost of one in, one out ! My daughter, now less wayward chose to go back to her mum & there she stayed, however at the same time my son (with disabilities) was rejected by his mother after a period of mistreatment unknown to me, and so he came to live with me permanently. Due to his disabilities I quit my then part-time work and claimed Income Support, over time DLA was claimed & I am now his full-time carer for at least the next 3 years, but as a result I had even less means to pay my debts which is still the case & I do admit I have stuck my head in the sand in the face of unsympathetic creditors & demanding DCA's so much so that I simply abandoned my dealings with them.

In October this year out of the blue a knock on the door served me with 'an order to attend court' to establish means in relation to a CCJ obtained by GMAC (without my knowledge in 2010 at my old address) That shock to the system prompted me to look deeper into my credit files to establish the extent of my debts.

The advice given by CCCS (before it became Stepchange) was to go down the BR route, strangely when it became Stepchange this changed to 'making an arrangement' but other advice & the CAB advise the BR route also. Here are 3 dilemmas that seem to just keep me delaying the process, which is far from ideal ...

1) I have struggled on with Capital One since 2002, the sub-prime card has been a means to an end, essential for living in a town where no garage takes cash for fuel ! The limit has grown from £200 to just being upped again to £1800 in September 2012, of course I have spent what they have offered, I have had to for everyday expenses but always tried to make their repayments every month thinking that having the card was a god send ... Not the case I realise, it's healthy at the moment, but I imagine I should stop paying now & eventually they might take it to default ? Do I wait for that before going BR ? According to others it may take a while for Capital One to raise a default

2) I have x2 mobile accounts with Three, one for me, one for my son. They are pretty much all that is paid up to date, but total £70 a month for the 18 months. To speed up my BR, and gather the BR fees should I, or am I able to just terminate these mobile accounts or should I stop paying the bill now to get to a default stage or will the OR be able to do anything or consider I was reckless in putting healthy (but now realised as unaffordable accounts) into the BR ?

3) Perhaps for me the most worrying reason I keep putting BR off ... an old vehicle on HP via sub-prime Lender Welcome Finance was defaulted on in 2008, I demanded many times they terminate my agreement and repossess the car but they ignored every request so I stashed the vehicle off-road for several years until a brief period of use in early 2011, eventually scrapping the vehicle as unserviceable in mid 2011 (having read that Welcome Finance had ceased trading, also the fact no one was pursuing the debt & they had ignored my repossession requests) The recent 'order to attend court' got me into looking through my 3 CRA files for other debt information, and I found the now scrapped car debt was sold on to MKDP Llp but still shown as the only "Hire Purchase" debt I have. Further investigations have made me realise to my horror that I have effectively scrapped a vehicle that does not belong to me (I wrongly assumed the vehicle was mine to scrap) so I'm very worried about the implications of this. Does anyone know if it's a criminal offence to have scrapped an HP vehicle ? That would be awful. I note BR does not include HP debts either so even going BR would leave me with £9,000 of debt, with me having no idea quite how to remedy it any advice on this ?

Would it be better with regards to BR to stop putting it off & just go for it ? It is the best & only solution for me in the grand scheme of things, so maybe I should just get on with it & go through all the problems, why's & how's with the OR at a later stage ?

Thanks in advance for any advice given, keep up the good work

fermi

1) No. You don't have to wait for it to default.

2) You can scrap one or both and put the unpaid contract/fees into the BR. If you want to keep your own one that may be OK as well, as you are allowed reasonable mobile costs.

3) HP/secured debt is not covered by bankruptcy only to the extent that the lender can sell the asset to get back what was owed. So if the asset is worthless or gone, then the whole amount falls into the bankruptcy as an unsecured debt.

Others may be able to comment as to the legality of scrapping the car. Can't imagine it would be a criminal matter though?

PippaGirl_2

No need to wait for a default on the CO card, the debit balance will be taken in to your BR and you can manage without credit once the debt is gone and living is affordable again.

Mobile contracts signed before BR are null and void once BR, most providers don't ask for the phones back and so it is easy to pop a payg sim in the phone and carry on using the phone at a much reduced cost.

I'm not sure of the implications of scrapping a car taken out on HP, hopefully someone else can advise.

It does sound as if BR is inevitable for you though and would no doubt release you from a massive emotional burden. What assets do you have? Do you own a property and is there any equity or are you in rented? Do you own another car now? etc.

The most important thing to remember is, there is a way through this and no problem has no solution.

simon78

Thank you so much for both your replies here

@Fermi I am hoping someone will be able to shed light on the implications of disposing of a car subject to HP, I guess scrapping is less wrong than having knowingly sold it on morally but legally it might not quite scan the same way ... I very much hope it's a civil issue in any case, as you point out the asset is gone, the DVLA can vouch for that (I must add that despite me scrapping the vehicle I have seen it within 10 miles driving around !) I did read somewhere about 'HP shortfall' becoming an unsecured debt in the BR, I guess with the vehicle scrapped the whole 9k can be classed as shortfall ... I'll hold out for clarification anyway & hope my trump card of many ignored 'VT' requests / refusal to repossess when really they should have done so proves helpful in the event of any major trouble arising ...

re: Capital One / Three Mobile I thank you both for your advice there, it must then be a case of not waiting about to get my BR sorted, I think over the years I've been put off not knowing 'when' to finally take the BR plunge ...

@PippaGirl, BR does indeed seem inevitable, and with it would come a huge emotional & mental relief, it's been a roller-coaster few years with kids in & out, I've gone from full time work & CSA payments made re: the kids to becoming an instant single parent, and now a full-time carer, I've just about got my head around that part but the debt side of things has taken a huge toll over the years, keeps me awake most nights feverishly surfing the web for the best solution ... I think the time in life is right now, I have no assets bar a car (value £910 on Parkers) I own no property, I'm a H/A tennant, nor do I have any applicable assets, my son has had 2 years of DLA to date now re-awarded for another 3 years, I will remain a full-time carer for him throughout that time & out of work, so right now I have time to concentrate on the whole BR thing & getting though the first year with the goal of giving me (& my son) a happier, money worry-free future - and hopefully some more sleep at night

Thanks again !

notanewuser

simon78 wrote: »

Thank you so much for both your replies here

@Fermi I am hoping someone will be able to shed light on the implications of disposing of a car subject to HP, I guess scrapping is less wrong than having knowingly sold it on morally but legally it might not quite scan the same way ... I very much hope it's a civil issue in any case, as you point out the asset is gone, the DVLA can vouch for that (I must add that despite me scrapping the vehicle I have seen it within 10 miles driving around !) I did read somewhere about 'HP shortfall' becoming an unsecured debt in the BR, I guess with the vehicle scrapped the whole 9k can be classed as shortfall ... I'll hold out for clarification anyway & hope my trump card of many ignored 'VT' requests / refusal to repossess when really they should have done so proves helpful in the event of any major trouble arising ...

Did you not get paperwork confirming the car had been scrapped?

simon78

@notanewuser just the V5/3 sale to motor trade, insurer or dismantler yellow section, which the scrap man stamped on collection, that of course went off to DVLA. I don't recall seeing an acknowledgement letter ever, but I called DVLA the other day who confirm they r'cvd the V5/3 and can provide if needed the date I ceased to be the vehicle owner. In hindsight however it would have been better to obtain some kind of receipt After 3 years of the creditor ignoring requests to collect I just wanted rid & to own / run a car I had paid for myself. All along I have believed that I could scrap the vehicle if required as my name was on the V5, a show of ignorance on my part unfortunately ... I assumed it would be discovered eventually to be just another figure outstanding like my other debts for inclusion in any future BR ...

notanewuser

But if the car wasn't actually scrapped, with all the legalities that usually involved (I believe you should get a certificate from the scrappie, not just the sold slip), them you've just sold it, haven't you? If you didn't have the right to do that, surely the current holders of the HP could go after the new "owner" to repossess the car, and after you for any outstanding balance.

simon78

@notanewuser indeed, fair points I called a number of 'scrap car' / 'cars4scrap' people from the local paper with a view to getting rid asap, I went with the company who were prepared to drive to me with a low loader (due to my location) and that's as deep as I thought about it. There is certainly more to think about now, there's certainly a ring to the certificate but not being 100% at the time I just went with the 'dismantler' part of the yellow slip on the basis I told them the car was for scrap and unserviceable. The fact I saw it driving around Canvey Island soon after did send a warning signal I must admit, not exactly the 'for scrap' I had in mind ... I just wanted rid after so long of being ignored requesting Welcome come & collect it. I imagine yep, the debt buyer could very well go after the new "owner" if it was sold on, he would be an innocent purchaser mind if the scrappy did sell it on. I'm happy for them to come after me for the balance or the full amount, hopefully so that I may roll it into my BR & can conclude all debt matters at once ...

Perhaps contacting the debt buyer to explain the situation (but not mentioning BR) might clarify what they wish to do ? Welcome had said once about switching the HP to an unsecured loan but for a higher amount, I was having none of that at the time. Maybe the debt buyer would offer the same, the amount then rolling into BR ...

tiggerbodhi

"BR does indeed seem inevitable, and with it would come a huge emotional & mental relief" Can re-assure you this is very true, will give you and your family the breathing space and "new start" it has for me.

As for the Car and HP/Scrapping, hopefully someone will come along with a definitive answer, but be careful of the keyboard lawyers who may be wrong! whatever happens it is not a criminal matter and would end up an unsecured debt, this debt would have occured prior to BR therefore would be included in your BR.

If the car was not scrapped and sold on instead the HP company (possibly no longer trading) cannot re-possess the car if the person bought it in good faith, then can chase you for the outstanding balance, but this would be "swallowed" by your BR.

Have you put the registration number into the DVLA website to see if it is still taxed and when it was last taxed? might give you a clue if it was scrapped or put back on the road.

TBH in the scheme of things have to agree with pippagirl "The most important thing to remember is, there is a way through this and no problem has no solution."

Good luck with whatever you decide,

debtinfo

ok my thoughts, first and foremost it can be a criminal offence to sell a vehicle subject to HP under certain circumstances as it would be theft. But there are quite a few hurdles to jump over before you would get to that point. one would be intent and given that you kept it for 3 years whilst asking them to take it away leans away from that, also given that you dispossed of it for scrap is another. Also i guess that it was of low value and in the remote chance they did try and prosecute you for the money it would only be for the value of the vehicle not the amount owing as that would be the part that had been dispossed of illeagaly, but i would suggest the chances are low, it would help though if you had a receipt or a copy of the submission to the DVLA