car??

skint98

My husband and I plan to apply for bankruptcy in the next few months. I have a car on HP which is due to be taxed and MOT'ed in the next couple of months. I called the HP company and they have said that when I go bankrupt they will almost definitely take the car back. My plan was to buy a cheap run around as I really need a car for work but as yet haven't seen anything. If my mum were to take out a small loan to buy a car for me to use how likely would the OR be to let me have an allowance to pay my mum for the loan, say approx. £50 a month? I'm assuming that this will be an absolute no no but would just like to explore all options. The term clutching at straws is springing to mind.

alastairq

Hi....to formally apply to repay a loan from MUm, would elicit the response that, the loan would be included in the bankruptcy [if taken out, ie, car bought, pre-BR petition date]

However, Mum can, & will be, the car owner if she takes out the loan, buys the car ,etc....but you could easily be the main user [and the person named on the V5c too]...this means the car would not be your asset..which makes life a bit easier when Bankrupt, as the car would not be subject to the value constraints for a car 'exempted-as-an-asset'....[currently no more than circa £1000, by the current IS rules]

Can you repay her after your Automatic Discharge? [1 year from date of petition]

Also, there is nothing to stop you unofficially paying Mum something, from within your SOA, but not directly trying to claim for it.

Whilst, in your SOA, you claim various expenditures [haircuts,. holidays,etc, as examples]....there is nothing to prevent you spending money on whatever you like.

So, if you can find £50's worth of savings from other items of expenditure, that's fine...just don't tell anyone about it.

There is another thread currently running concerning a foreign holiday, wherein folk explain the fact that the OR doesn't specify what you spend your SOA on.....

skint98

Thanks very much for your reply. Being careful with how I spend my money may be an option. I will speak to my mum in more details and see how she would feel about perhaps waiting for some of the money until discharge but good to know that this could be an option.

alastairq

but good to know that this could be an option.

It really boils down to the fact that, once discharged, if one chose to make payments to another, then the OR is not involved.....aside from certain limited aspects, a Discharged BR has no further duties towards the Bankruptcy.

freddy911

alastairq wrote: »

It really boils down to the fact that, once discharged, if one chose to make payments to another, then the OR is not involved.....aside from certain limited aspects, a Discharged BR has no further duties towards the Bankruptcy.

Provided ofcause the op does not get ipa otherwise it will be 3 years that the or will be in control of their spending.

TheGardener

freddy911 wrote: »

Provided ofcause the op does not get ipa otherwise it will be 3 years that the or will be in control of their spending.

I would tend to agree with alastairq - once the IPA is arranged, the OR is not "in control of their spending" The BR is free to spend the income they keep as they wish. If they choose to spend less on food and personal items than the agreed figure in order to offer a payment to their mother for the car, they can. I'm not suggesting that would be easy, but it is possible without doing anything illegal or in breach of the IPA.
During the IPA (if one were in place) the BR is only obliged to inform the OR if their circumstances/income change + or -, not if they choose to spend a holiday allowance on a car for example.