Motability and Bankruptcy

izools

Simple question.

Will a car provided under the Motability lease hire scheme (not HP), have to be surrendered under bankruptcy?

The car in question is worth £30,000 BUT is owned by Motability and paid for by the mobility component of OH's DLA. The car is essential for him to get around as he can only walk 20ft at a time, I am the nominated driver as his license was revoked under medical grounds.

Would he have to give this up? As his sole source of income is social security benefits if he DID have to give it up the OR wouldn't be able to put an IPA on his Mobility allowance anyway.

I found this:

15) The Motability Scheme and bankruptcy

The Motability Scheme enables disabled people to obtain a new car, powered wheelchair or scooter, under a contract hire variable lease agreement or under a hire purchase agreement. To be eligible for the scheme the person must be in receipt of the higher rate mobility component of the Disability Living Allowance, or in receipt of a War Pensioners Mobility Supplement. A parent or carer may apply on behalf of a child aged three or over who is eligible under the scheme. The beneficiary does not need to be the driver of the vehicle and may nominate two other people as drivers.

In order to establish the type of agreement that exists, if not already known, send form NHP, LOIS (DO73) – ‘Notice to Hire Purchase Company’ (amending or adding any appropriate text as necessary).

The scheme is operated by Motability Finance Limited, City Gate House, 22 Southwark Bridge Road, London, SE1 9HB.

Contract hire variable lease agreement

The vast majority (95%) of vehicles funded under the Motability Scheme are by way of a contract hire variable lease agreement. Where a vehicle is supplied under such an agreement the individual is never the legal owner of the vehicle, and neither the vehicle nor the agreement is capable of vesting in the bankruptcy estate. On that basis the official receiver has no interest in the vehicle and is not in a position to object or consent to the individual keeping the vehicle.

Hire purchase agreement

The hire purchase agreement option operates as a traditional hire purchase agreement but is dependent on the individual continuing to receive the qualifying benefit payments. These agreements do vest in the trustee of a bankruptcy estate and are capable of being adopted. However, any action by the trustee is subject to the special terms of the Motability Scheme.

For more information and additional guidance, see Technical Notice T7-08

Which puts my mind at ease BUT I've found several threads online to the contrary.

/confused

izools

Oh it's OK, the people who had issues were enrolling in the HP Motability scheme, not the lease hire scheme. Fine. Moving on...

debt_doctor

Hi,

If it is the hire scheme where the high rate mobility pays for everything apart from fuel and the vehicle never becomes owned by the disabled person then there should be no issue at all.

DD

izools

debt_doctor wrote: »

Hi,

If it is the hire scheme where the high rate mobility pays for everything apart from fuel and the vehicle never becomes owned by the disabled person then there should be no issue at all.

DD

Yep that's exactly what it is. Thanks for the reassurances

mysterio_2

Brother has motability vehicles...has done since bankruptcy with NO issues