Bankruptcy & Cars

up_the_creek_5

Hello

I am really worried i will lose my car if i go BR. It is a 1994 model with over 100,000K on the clock. I have had it for 5 years & i own it outright. It is in average condition & the guides val it at £2000 max (am i right in thinking the auction val would be less).

I use it mainly to ferry my mother (in rec of attendance allowance) & my brother (in rec of DLA) thro him i get a free disabled tax disc. Strictly speaking i am only supposed to use the vechile for him. Most of the time this is the case but obviously in the real world i do have to use it myself e.g. when i have a very early start for work & public transport has not started.

Now do i tell the O/R about the free road tax as i am worried they might contact my brother & i don't want him to find out or get into trouble. On the other hand when i am on certain work patterns public transport is an option.

I also realise if i lost the car i may qualify for a disabled car but i desperately want to keep this one as i do not want any of my family finding out if i decide to go BR.

I have been confused on the gen advice given re: BR & cars. Some say they don't touch cars under £2K in val yet i have heard stories of bangers being taken. Has anyone had experience of being allowed to keep a car when other modes of transport where availiable.

Will the O/R contact my employer re: my work patterns etc.

Finally please don't get me wrong but about 2 years ago my mother cashed in some investments & gave me & my brother £3K each. I have never spent this money & left it in her savings a/c i decided to keep it for a "rainy day". I am therefore wondering if the O/R does take my car how does he val it, would i have to take it to a valuer? would i be given the opportunity to buy the vechile back & would he want to know where the cash came from. If i said my mother would the O/R contact her.

I have to ask all this as i am desperate that my family does not find out. I must re-iterate that i am not looking to con the O/R.

Any advice please

fermi

Cars and bankruptcy are complicated and there are no exact circumstances where you will automatically be allowed to keep a car, or retain access to one of lower value.

The Official Receiver instead assesses each individual case on its own merits, and it is really up to you to present the reasons why you consider that the vehicle should be regarded as 'exempt property', or that you should be allowed to replace it with one of lower value.

Reasons that the OR may exempt a vehicle can be:

• It is required for your reasonable domestic needs. For example: If you live in a location with no or limited public transport, there is no other practical way of getting children to their schools, access to essential services etc.
• It is required for employment: It is impossible, or highly uneconomic for you to travel to and from your employment by other means. Or your employment directly involves the use of the vehicle.
• You or a relative are disabled or of limited mobility, and the vehicle is essential to maintain their reasonable access to care and the normal services someone not impaired would expect.

The above is a very quick summary of the reasons an OR might accept.
A much fuller explanation can be found here:

http://bankruptcy.informe.com/cars-and-bankruptcy-dt72.html

or http://www.debtquestions.co.uk/debt_forum/viewtopic.php?t=14954

It must be stressed that the OR will require that access to the vehicle is necessary/essential, not just convenient.

It is really up to you to make the case. Exemptions are not granted automatically. The OR will not always have the time or info, unless you make them fully aware of the circumstances.

If the OR decides that it is justified for you to keep a vehicle, this is when the £2000 figure that you have heard comes into play. This is the general value above which the OR will start considering whether they should require you to dispose of the vehicle and replace it with a cheaper one. It is not an exact figure, just a guideline.
If the value of your vehicle is hovering around this value, I would try and get several written valuations (if you can) and then give the lowest to the OR if it becomes an issue. Otherwise the OR will depend upon the book price (Parkers guide). I'm not sure if the OR make an allowance for the auction price, but a quote from a dealer should be lower than the 'private sale' price in Parkers.

And yes, I too have heard of the OR taking cars worth only a few hundreds, but in all these cases it appears that the OR considers that there are no reasonable grounds to 'exempt' the vehicle, and that even in auction there will be a net realisation of funds to the estate.

With respect to the rest of your questions, I'm really not sure if you would be able to get away with some of the juggling of funds/car ownership etc and the OR without your family becoming aware of your bankruptcy.
While I don't know your family (and can't therefore judge their reaction) it seems that more often than not is better to be honest with your family. However, as I said I cannot presume to judge your own personal/family situation.

If the £3000 held by your mother is still in her account, in her name, and no legal entitlement has been granted to you with respect to it, then as far as the OR is concerned it is her money. Which means that if push comes to shove that she could make a fair offer to purchase the car. I imagine it would be difficult to conceal your bankruptcy though.

As you can no doubt see, cars and bankruptcy are a thorny issue, but there are others who post on this forum who have successfully argued to be allowed to keep their cars under several different circumstances. So hopefully there will be some more practical advice forthcoming.

Broken_hearted

If the car is required for use by a disabled person then the OR shouldn't take it.

savagevixen

If I were you, I would give the Insolvency Service an anonymous ring and chat it through, they are very helpful.
When we spoke to the OR she required as much info as possible to try to keep the cars. OH's was straightforward, we live in the sticks, rubbish public transport etc. His was allowed. Mine is worth £3500-£4000, and was purchased last year. It is an MPV. I have 5 kids, the eldest receives DLA, he has Aspergers. I had to list how frequently his hosp/doc appointments were and the fact that I have to drive to school etc, need car for food shopping, also baby has reflux disorder and hosp appointments etc. And I was allowed to keep it too!!!
With regard to the tax, to be honest don't mention it, but don't allow for it in your SOA.
I can't see anything wrong with that, your not paying for it, so it is not an expenditure. If she/he queries why there is no tax included, you can explain, they are human.
It does go in the local paper though, and even if you are confident your family don't read it, be aware that busy-bodies do, and it is fab gossip.

fermi

savagevixen wrote: »

Mine is worth £3500-£4000, and was purchased last year. It is an MPV. I have 5 kids, the eldest receives DLA, he has Aspergers. I had to list how frequently his hosp/doc appointments were and the fact that I have to drive to school etc, need car for food shopping, also baby has reflux disorder and hosp appointments etc. And I was allowed to keep it too!!!

Thanks Vix I'd forgotten that. :beer:

Just goes to show the value of preparing your case, and that the guidelines that the OR follows are guidelines only, and not hard and fast rules.

sgreenwood

Re-register the car (transfer ownership via the DVLA) to your mother / brother’s name and address. Re-insure it, again with their name/address details with you as an additional driver (to prevent claims from any bailiff that you do, in fact, own it if they see the insurance certificate).

That way, technically, you don’t own the asset for them to remove.

Any legit bailiff company will do a DVLA / HPI check before removing a car. As soon as they see it’s not yours, they’ll go nowhere near it.

The cost of re-registering / re-insuring the car is negligable in comparison to you losing your only method of transport.

Obviously, clear this with your mother / brother beforehand and don’t let anybody official know.

I should point out, that a bailiff firm will only remove a car as an absolute last resort due to the costs involved (police have to be informed, has to be securely stored for a long period and is worth relatively little at auction anyway). It’s generally high value cars that are removed to cover these costs although each case is assessed accordingly.

sgreenwood

Upon re-reading your post I see that you don't want your family to find out.

Obviously some of the above advice is rendered useless - although if you have a close friend that you can trust then confide in them and carry out the same plan (although, be very carefull as they would technically now own your car!).

I have had debt issues in the past (still do!) and, like you, didn't want my family to discover them. However, I should point out that once I told them, the whole situation seemed much easier to handle and gave me someone close to turn to for advice - although I do appreciate that each case is different.

sgreenwood

Fair point blind-as-a-bat. My tip was a quick thought - something I would consider as an absolute last resort - and wasn't meant to be 'advice' as such.

Apologies.

fermi

sgreenwood wrote: »

Re-register the car (transfer ownership via the DVLA) to your mother / brother’s name and address. Re-insure it, again with their name/address details with you as an additional driver (to prevent claims from any bailiff that you do, in fact, own it if they see the insurance certificate).

That way, technically, you don’t own the asset for them to remove.

Any legit bailiff company will do a DVLA / HPI check before removing a car. As soon as they see it’s not yours, they’ll go nowhere near it.

The cost of re-registering / re-insuring the car is negligable in comparison to you losing your only method of transport.

Obviously, clear this with your mother / brother beforehand and don’t let anybody official know.

I should point out, that a bailiff firm will only remove a car as an absolute last resort due to the costs involved (police have to be informed, has to be securely stored for a long period and is worth relatively little at auction anyway). It’s generally high value cars that are removed to cover these costs although each case is assessed accordingly.

This is a fantastic way to get into deep trouble with the Official Receiver.

The OR is wise to tactics such as these to hide assets, as they have seen it all before.

They can check with DVLA for any transfer of 'registered keeper' for a vehicle in your name. They are also fully aware that 'registered keeper' is not the same as legal owner, and will come down on you like the proverbial 'ton of bricks' if you try this.

Again, this is a very very silly idea.

EDIT: sgreenwood, your post while I was writing this is noted and appreciated.

philnicandamy

addo79 wrote: »

SGEENWOOD- thats a stupid thing to do before bankruptcy and would land you in serious trouble... I WOULD ADVISE ALL TO IGNORE SGREENWOODS LAST POST UNLESS U WANT TO END UP IN DEEP WATER WITH THE OR.

do you bother reading any of these posts? he's already apologised for posting a suggestion