Whats my best Option

Bakeybadoo

Richard_S wrote: »

Bakey,

The only way to keep it going would be to transfer the agreement to a third party. The O.R wouldn't allow you pay that amount out of your I&E Account to one company, that would be showing preference.

Rich

We weren't told that and even on National Debtline it says differently.

Bankruptcy & Hire Purchase Agreements

There may be a clause in the hire purchase agreement that allows the hire purchase company to terminate the agreement if you become bankrupt. In this event, you will have to return the item.

If you wish to keep the item, it is possible for the hire purchase company not to cancel the agreement and for the trustee to allow you to continue to make payments. Phone us for advice.

Richard_S

Bakeybadoo wrote: »

We weren't told that and even on National Debtline it says differently.

Hi Bakey,

I'd love to be proved wrong and I'm only going on a conversation we had with our O.R and what other posters have said.

I've seen the guidance you quoted but when you think about how an I&E A/C is scrutinised by the O.R they'd never allow £270 / month to go on what they would view as a luxury car. After 4 months that would amount to over a £1k, don't you think that the O.R would give the bankrupt a £1k to buy an older vehicle and keep the £270 / month going towards an IPA that would benefit all creditors and not just the H.P company. If it was a washing machine for example and only cost £10 per month then it probably would be allowed.

If you're right Bakey there's maybe a business proposition in the making here . We approach all people considering bankrutpcy and lease cars to them knowing that when they declare bankruptcy we'll definitely get paid because the customer would have no other debts to consider :rotfl:

Rich

Bakeybadoo

:laugh: Now, there's an idea!

I agree that it could be viewed as unfair but if you could prove you needed it for for work/health reasons, you might have a fair chance of keeping it.

I mean, we couldn't afford the £281 per month so it was always going to go.

Jonto_3

Bakeybadoo wrote: »

:laugh: Now, there's an idea!

I agree that it could be viewed as unfair but if you could prove you needed it for for work/health reasons, you might have a fair chance of keeping it.

I mean, we couldn't afford the £281 per month so it was always going to go.

What i said then all those posts ago.

fermi

If the van is required for the BR's living, it and any equity in it may be considered exempt property, and so will not form part of the estate.

31.2.15 Disposal of vehicle subject to finance agreements

Where a vehicle is subject to a hire purchase, conditional sale or lease-purchase agreement the official receiver should contact the hiring owner, initially by telephone, followed up in writing. He/she should check the nature of the agreement, the amount outstanding under the agreement and the settlement figure required to complete the agreement and obtain ownership of the vehicle. The official receiver should consider whether there is any benefit for the estate (by consulting agents if necessary). If there is no equity, the official receiver should inform the hiring owner that he/she does not intend to deal with the vehicle and that it should be collected as soon as possible.

If there is sufficient equity in the vehicle to provide a benefit for the estate after paying the costs of sale, the hiring owner should be asked in advance to confirm that he/she has no objection to a sale by the official receiver. The sale of a vehicle subject to any form of agreement should always be placed in the hands of agents. If there is doubt as to whether the vehicle can be sold for a sum sufficient to pay the settlement figure under the agreement, it may be possible to agree with the hiring owner that he/she will deal with the vehicle and hold any surplus to the order of the official receiver or any insolvency practitioner subsequently appointed as liquidator or trustee.

31.2.16 Exempt property

The exempt property provisions [note 5] (see Part 3) apply to items acquired by the bankrupt whether for cash or subject to finance agreements. The provisions apply even if there is no equity in the agreement. The hiring owner should be notified of the bankruptcy order, whether a claim has been made to the item as exempt property and, if so, whether the claim has been accepted by the official receiver. If the hiring owner is discontent with the position, e.g. the bankrupt is in arrears with payments, it may choose to exercise a right under the agreement to repossess the vehicle (see paragraph 31.2.12)

The hire-purchase/finance company may decide to repossess the vehicle, but only under the terms of the contract.

With respect to payments to the finance company, these are a legitimate and acceptable business cost, and so will not be considered as a preferential payment.

This is my understanding, as far as it goes.

What the OR will not normally do is deliberately deprive a BR of the means to make a living. However, they cannot second guess/control the actions of third-parties.

Richard_S

fermi wrote: »

If the van is required for the BR's living, it and any equity in it may be considered exempt property, and so will not form part of the estate.


The hire-purchase/finance company may decide to repossess the vehicle, but only under the terms of the contract.

With respect to payments to the finance company, these are a legitimate and acceptable business cost, and so will not be considered as a preferential payment.

This is my understanding, as far as it goes.

What the OR will not normally do is deliberately deprive a BR of the means to make a living. However, they cannot second guess/control the actions of third-parties.

Hi fermi,

That'swhat I've been saying about the van, but I can't see a bankrupt being allowed to continue with payments of £270 per month for what the O.R would consider a luxury vehicle. I'll be the first to apologise if I'm wrong and wish like mad that I'd bought a new Ferrari (on H.P of course) before we were declared bankrupt

Richard

fermi

Richard_S wrote: »

Hi fermi,

That'swhat I've been saying about the van, but I can't see a bankrupt being allowed to continue with payments of £270 per month for what the O.R would consider a luxury vehicle. I'll be the first to apologise if I'm wrong and wish like mad that I'd bought a new Ferrari (on H.P of course) before we were declared bankrupt

Richard

Yes. A private vehicle, for personal use, is fair game as far as the OR is concerned. The onus is on the BR so satisfy the OR it should be exempt.

31.2.21 Bankrupt claiming vehicle as exempt property

It the bankrupt's responsibility to satisfy the official receiver that a vehicle is exempt property, i.e. that it is necessary for his/her use personally in his/her employment, business or vocation, or is necessary to meet the basic domestic needs of the bankrupt and his/her family. In the case of a claim for exemption to meet domestic needs the official receiver must be satisfied that the motor vehicle is necessary to the extent that no practical alternative exists, to meet a genuine need and not merely a matter of convenience. If the use of a vehicle does not meet the test for necessity the vehicle is vested in the bankruptcy estate and the official receiver as trustee should instead pursue with the bankrupt the option to make a reasonable offer for the purchase of the vehicle (see paragraph 31.2.34).

The bankrupt's claim should be dealt with at the initial interview in either the narrative statement or in supplementary questions to the PIQ.

The bankrupt needs to be able to satisfy the official receiver that the vehicle is both necessary for his/her employment, business or vocation and is necessary personally to the bankrupt. This does not mean that the vehicle must be used exclusively by the bankrupt but it must be necessary to him/her not just to the other users.

Whether or not a vehicle is exempt property is in some cases a difficult question. In such circumstances, official receivers will need to use their discretion and consider each case according to its merits within the guidelines issued to official receivers. In all cases official receivers should apply the guidance strictly and rigorously. It is for the bankrupt to convince the official receiver that any motor vehicle is necessary within the exemptions. The value of the vehicle is not a determining factor.

The OR would contact the finance company to collect the car, and terminate/end the agreement. Any shortfall or equity realised from a sale would then form part of the BR's estate.

See:

http://www.insolvency.gov.uk/freedomofinformation/technical/techmanvol1/Ch25-36/Chapter31/part2/part2/part_2.htm

and

http://www.insolvency.gov.uk/freedomofinformation/technical/techmanvol1/Ch25-36/Chapter31/part2/part3/part_3.htm