Bankruptcy & hire-purchase car

NellGwynn

Hi everyone,

I’ve gained some very good advice here and also from Debt Advisers. Because of my debt and mental illness, bankruptcy is the best option for me. I made an appointment for the court to hear my petition this Wednesday.

I suffer from generalised anxiety disorder, agoraphobia and depression, so the whole scenario is going to be so overwhelming for me. Thankfully, a friend is accompanying me though.

I have a big worry about a car that is on hire-purchase. It’s a 2007 car with about 93,000 miles on the clock and estimated around £2,000. Here’s where it gets tricky: the hire-purchase agreement is in my relative’s name. I had an old, unsafe car at the time and he said that he would get the car on finance for me and he would pay the monthly instalments. About a day or so after entering into the agreement, he said he couldn’t afford the repayments, so I had to make them. I was able to afford to make them at that time.

I ran into financial difficulty and couldn’t afford to make the repayments any longer, so my mum was making them instead. I would have asked my relative to surrender the car, but my fianc! was using it to commute a long distance to and from work (which worked out cheaper than getting public transport). Now it’s come to the point where mum can’t afford the repayments and neither can I or my fianc!.

I’m just really, really worried that the judge will take a dim view of this. I want get the ball in motion and get my relative to surrender the car as I can’t afford it anymore.

I just wondered what your views are on my scenario. If you were in the judge’s position, what would you think?

Just feel like breaking down and crying. So unhappy and worried

TheGardener

Firstly - don't panic! There is no debt problem that cant be solved and you will get plenty of support on here.

As the car is not in your name - its not your debt or asset so as far as the judge is concerned, the car is irrelevant. If no one else is paying for the car, your relative will have to pay - if they can't then they will hand the car back of their own accord I would think? . However, if it is your fianc! who is using the car to travel to work - can they not pay for it? Surely if the public transport cost is higher than the cost of the car - your fianc! is better off paying towards the car?

Don't get upset - life in debt is far more stressful and upsetting than life after BR.

longtermplanner

The Official Receiver won't allow the cost of you paying your relative for a HP car to get your fianc! to work in your allowable expenses.

But that isn't really relevant. Even if you don't go bankrupt, you say these car payments are unaffordable. So they have to stop and your relative has to either make them themselves or have the car repossessed, this isn't your problem. (You shouldn't feel guilty about it either, as you were told originally that you wouldn't have to pay!)

Confusing matters by worrying about what "the judge" will do when you go bankrupt isn't helping you two to face up to this underlying problem. How will your fiance get to work without this car? because if it can't be afforded, then it is going to have to go.

NellGwynn

Hi The Gardener and longtermplanner,

You both answered my questions and also made me feel at ease for today. It really helped having some clarification.

I went to court today and I've been made bankrupt.

Thanks for all the help.

longtermplanner

I hope you woke up this morning feeling relieved that that is all over. Obviously you still have problems to sort out and the OR interview which no-one looks forwards to, but you no longer owe all that money And you have taken the big step in moving forward to better times.

NellGwynn

Yes, it's started to sink in now

Thanks for your kind words and advice :beer: