Thinking of bankruptcy don't want to lose my car

Whitewinston

I am in financial difficulty. 3 years ago I took out an iva as I had trouble meeting loan and credit card repayments. I have missed last months payment due to reduced finances. I was in receipt of housing benefit which I am now not entitled to, was receiving £450pm. I wrote to council telling them my daughter had started work, they didn't receive it and I admit I didn't check my payments to see if they had gone down. Last month I was taken to court and was fined with a 12 month conditional discharge. I have to repay £6k at £100 pm. Also child benefit told me the apprenticeship my other daughter was doing was not approved for continued payment even tho I had rung them up to ask, this resulted in overpayment of £1k and £2k child tax credit. Child benefit has been stopped till April 2014 and ctc reduced by half. I also have a 14 yr old. My job is under review due to the court case as I work for HMRC so may be dismissed. My outgoings are £140 more than my incomings without including £100 I have to pay to council. I have a car that I bought through a payment breaks rom my iva that I paid £1200 for last year. Using Parkers valuation it's worth around £700. I don't want to lose it as it was my brothers car who died of cancer last year and I bought it from my sister in law. Is there any chance I would be able to keep the car? And is bankruptcy the answer or struggle through and offer token payments to my creditors - iva ones? Please advise I am worried sick

Johno100

Whitewinston wrote: »

Blah....................I have a car that I bought through a payment breaks from my iva that I paid £1200 for last year. Using Parkers valuation it's worth around £700. ..........Is there any chance I would be able to keep the car? ...........more blah.

There is a very good chance, given the value of the vehicle, that you would get a favourable answer if you asked for the vehicle to be exempted.

dojoman

Unfortunately the price of the car has nothing to do with whether you will be able to keep it or not. You will have to prove that you need it and it is essential otherwise the OR may well have an interest in it. Generally you are allowed a car up to £1000 but as said it must be essential either for work or for health reasons, cars of lower value than yours have been taken in the past.

SteveABC

Sorry to hear of the predicament you are in.

As far as the car goes, every OR is different, but in my case, it was worth £1500 and I needed it to travel 25 miles each way to work. I was allowed to keep it.

Good luck.;)

darren_clarke

you will be able to keep car, as if its only worth £700 prob cost about £300 in fees to sell and isnt worth it, i got told that a vehicle had to be worth over £3k for them to be intrested in selling it

alastairq

darren_clarke wrote: »

you will be able to keep car, as if its only worth £700 prob cost about £300 in fees to sell and isnt worth it, i got told that a vehicle had to be worth over £3k for them to be intrested in selling it

Unfortunately, in Bankruptcy, a petitioner doesn't get to 'keep' their car based upon value alone.

Unless the petitioner can demonstrate a 'need' for having their car exempted as an asset, then the OR will take the car for the BR estate.....even if only for its scrap value.

see the relevant section in the link below, for reasons for exemption?

https://forums.moneysavingexpert.com/discussion/1056083

Receivers engage agents to dispose of vehicular assets.


Current rules specify that the value of an exempted car must be no more than £1000. If an exemption is granted, and the car concerned has a greater value than above, it will be taken, sold/disposed of, and £1000 of the proceeds returned to the petitioner.

Of course, if a car cannot be exempted as an asset, then the petitioner has the option of purchasing the OR's interest in the car.

The main advantage of having a car exempted, lies in the ability to include all reasonable running costs within the SOA.

alastairq

My job is under review due to the court case as I work for HMRC so may be dismissed

since the above is a possibility.....and unemployment follows, then the car will likely not be exempted, unless a sound medical reason can be put forward, and evidenced

PippaGirl_2

Worth mentioning before you decide to go BR that such debts as you mention caused by fraud or failure to notify a change of circumstance are not usually allowed to be included in a BR petition and you may well remain liable for them afterwards so going BR may not remove your liability from this debt.

Whitewinston

I know the housing benefit can't be in included but the iva, cab and CTC can. My car also has a back passenger door that only opens from the inside so probably worth even less. If car has to be sold does travelling expenses get taken into account? I also use my car for getting shopping for my dad who is 92 this year and lives on his own. My debt not including HB is £18k. I have actually been offered a job if I lose mine which is a lot further then my job is now. Not sure what happens in bankruptcy if you lose your job. Is bankruptcy the best way forward?

alastairq

If car has to be sold does travelling expenses get taken into account?

yes they can.....for commuting, appointments and so on.

I also use my car for getting shopping for my dad who is 92 this year and lives on his own

I don't imagine occasional trips of that nature will gain an exemption....as there are alternatives.

Not sure what happens in bankruptcy if you lose your job

Whether a BR is employed or not does not affect the BR in itself.

The issue really is about whether a surplus of income is identified.

This would inevitably lead to an IPA over three years.

If living solely on benefits, an IPA would not be sought.

Whilst undischarged..or within an IPA, any changes to one's circumstances [financial] should be notified to the OR within 21 days....thus, for example, any surplus, or any IPA, can be varied up, down, or suspended altogether, as circumstances change.

Eve1975

My car was worth about £700 when i went bankrupt, had no MOT or tax so pretty worthless but was told by the official reciever they would have taken it still BUT the reason they did not was because I said I wanted to look for employment so without it, it could cause problems. I also said I helped my nan out with shopping etc as she was pretty much housebound, and with having a baby would make life very difficult for her and for me to travel to another town to do all this.

I was told when they made the decision for me to keep my car, it was purely so I could find a job and nothing to do with helping my nan out.