Bankruptcy Advice - Urgent

Viking73

Hi,

My friend is about to go bankrupt as he owes HMRC a large sum. He's a sole trader with a poor credit history, so about 2 years ago I bought him a van to help him out, and he repays me set amount on a monthly basis.

My friend is the registered owner of the van.

I'm still owed some money for the van so before the receivers come in we're looking at transferring ownership of the van back to me, to safeguard it from the receivers and to protect my investment. We can prove that I purchased the van as it was from a local dealer.

What I want to know is if this is legal or not?

Thanks

ghostfinder

it may be looked on as a preferential treatment to a creditor.

Your mate may get in trouble for this

brians_daughter

If he's paying you back a set amount then it's a debt and should be included alongside all other debts.

I am helping one of my students out with a DRO (I appreciate its a different process but its still a form of insolvency) and i know that those forms ask in the last 2 years have you sold/given away assets etc, as BR is a much more official process then i assume the van would deffo be picked up on.

A V5 document does NOT prove ownership, it proves responsibility ie who is responsible for tax, insurance etc. The student i am helping gather all her documentation uses a car that isn't hers but is expected to return it once her financial situation allows her to purchase a new one, this is not an issue with regards to the DRO.

Your friend running the risk of preferential creditor payments. ie paying you but not HMRC. That would be an issue.

Whats the value of the van? In theory he should be able to keep tools of the trade - if the van is worth £1500, then there may not be such an issue. If its £15,000 thats another matter

What i have written is my understanding of the situation, and i am sure more experienced and qualified people will be here shortly to clarify

arcon5

Do you both have any kind of written agreement? Even anything informal like emails, messages etc.

Two things to note: the registered keeper isn't necessarily the owner; I believe they can ask DVLA what vehicles he was registered keeper off in the past so seeing this change could cause problems.

It really depends what sort of arrangement there was... for example if you bought it for him on simply the understanding he owes you £x and will pay you £y per month then it could well be the amount he owes you will be written off in BR. If the agreement was you own the van and he pays the balance down and becomes the owner when you've been repaid then you could have a case of either having the vehicle back or continuing with the current arrangements (subject to the ORs approval and depending on its value).

debt_doctor

This would be an attempt to hide assets from the Official Receiver, which is an offence.
Transferring the registered keeper (it is not transfering ownership) would gain you nothing and bring suspicion.
It will be looked at as to who actually owns the vehicle, who has the receipt, who pays for repairs and running expenses and other matters.
If it is deemed that you own the vehicle then it is not a BR asset, if it is deemed that the BR is the owner then the vehicle will be lost unless exempt - which it could well be (exempt, that is).
Either way, no more payments can be made after BR towards the vehicle by the BR.

DD