How is a car on HP affected by a DRO

fatbelly

Should be fine.

The only problems would be if this was not a HP agreement or if it was a HP agreement that was due to finish in the next 12 months.

Either of those scenarios could mean you having an asset of a car worth over 1k.

As things stand you have the use of a car you do not own.

chrisp1968

It is a HP agreement and it isn't due to finish for 2 years, the company I get the car from doesn't report the payments to the CRAs. Would the HP company find out I've entered a DRO ? I think there is a bankruptcy clause in their t & c's ! Thanks

debt_doctor

Hi,
I agree with what has already been said.
The intermediary would not need to inform the DRO unit as you say it does not appear on your credit report.
I did a DRO last week which excluded a HP car worth £5k (no disabilities) it was on credit report so I did inform DRO pre order team. Partner was going to pay the repayments as not allowable expenses (£1k rule) - all went through with no issue.
Someone else would have to take over the repayments in this case (I see the point of using the DLA against the car - as the outgoing is listed as care needs, ie, non specific - just never done it for this scenario!) - but I could get comfortable with the idea.....
Two other things; As said, make SURE this is HP, some agreements look HP when they are not and a lot of HP agreements have an 'insolvency clause' where they could terminate the agreement. In practice I have never seen this happen if someone continues to make the payments.


DD

fatbelly

chrisp1968 wrote: »

It is a HP agreement and it isn't due to finish for 2 years, the company I get the car from doesn't report the payments to the CRAs. Would the HP company find out I've entered a DRO ? I think there is a bankruptcy clause in their t & c's ! Thanks

Thanks DD - reassured I wasn't missing anything here.

The HP company would probably never know - they are not going to get listed on the application and would be unlikely to trawl the insolvency register to check if their customers appear there.

The bankruptcy clause may not even apply here (depends on the wording) - a DRO is not bankruptcy but both are forms of insolvency.

chrisp1968

So I wouldn't need to tell the HP company about the DRO ? What if OR see the payment on my bank statements ? Sorry for all the questions but thanks for the replies

fatbelly

chrisp1968 wrote: »

So I wouldn't need to tell the HP company about the DRO ? What if OR see the payment on my bank statements ? Sorry for all the questions but thanks for the replies

Hi

Well I don't know what the T&Cs of your HP agreement say. If it requires you to inform them when you enter a DRO, then that's what it says. But I doubt that it does.

As far as the DRO is concerned, you are not required to tell your creditors anything - the DRO Unit does that, and in this case the HP company is not listed so that won't happen!

The DRO Unit can request to see anything they want but in practice do not do so. Your intermediary will have to understand what is going on. You are working within the Intermediary Guidance (as helpfully posted by Fermi) here so no need to be other than open about the situation with him/her.

tigerfeet2006

Your son's DLA payments go into the same account? If so then it's what they pay for.

chrisp1968

11 Our right to end the agreement
11.1 We will be entitled to assume that you refuse to comply with the terms of this agreement and to end this agreement, after giving you a default notice, if:
a) you break any of the provisions of clauses 2,3,4 or 6 of this agreement;
b) you provided false information when entering into this agreement;
c) the Vehicle is destroyed or treated as a total loss under any insurance claim;
d) you entered into this agreement for the purposes of your business and you stop trading or, if you are a partnership, the partnership is ended or court action has commenced to end it;
e) you have done anything which would allow any of your belongings, property, income or
savings to be legally removed to pay off any of your debts; or
f) any of the following happens:
(i) a statutory demand (that is, a written demand for payment of a debt of at least £750, which,
if not paid in full, may result in bankruptcy proceedings being brought against you) is not paid
in 21 days, or any steps are taken by you or anyone else to declare you bankrupt;
(ii) you take steps to enter into an arrangement or debt management plan with your creditors;
(iii) a bailiff or other officer controls or seizes the Vehicle or any of your assets following a
court order; or
(iv) the landlord of premises where the Vehicle is situated threatens, or takes steps, to seize or in any other way control the Vehicle or any of your assets.
11.2 If we end this agreement, subject to your rights as set out in the notice, “Repossession:
Your Rights,” we may take back the Vehicle from you and you must pay to us:
a) all instalments and other sums which have become payable by you to us under this
agreement, and
b) the outstanding balance of the Total Amount Payable, less:
(i) any Option to Purchase Fee and any rebate of charges to which you may be entitled and;
(ii) any money we receive from selling the Vehicle after we have deducted the costs of recovery, insurance and storage.


This is what is stated on the HP agreement t & c's

fatbelly

chrisp1968 wrote: »

11 Our right to end the agreement
11.1 We will be entitled to assume that you refuse to comply with the terms of this agreement and to end this agreement, after giving you a default notice, if:
a) you break any of the provisions of clauses 2,3,4 or 6 of this agreement;
b) you provided false information when entering into this agreement;
c) the Vehicle is destroyed or treated as a total loss under any insurance claim;
d) you entered into this agreement for the purposes of your business and you stop trading or, if you are a partnership, the partnership is ended or court action has commenced to end it;
e) you have done anything which would allow any of your belongings, property, income or
savings to be legally removed to pay off any of your debts; or
f) any of the following happens:
(i) a statutory demand (that is, a written demand for payment of a debt of at least £750, which,
if not paid in full, may result in bankruptcy proceedings being brought against you) is not paid
in 21 days, or any steps are taken by you or anyone else to declare you bankrupt;
(ii) you take steps to enter into an arrangement or debt management plan with your creditors;
(iii) a bailiff or other officer controls or seizes the Vehicle or any of your assets following a
court order; or
(iv) the landlord of premises where the Vehicle is situated threatens, or takes steps, to seize or in any other way control the Vehicle or any of your assets.
11.2 If we end this agreement, subject to your rights as set out in the notice, “Repossession:
Your Rights,” we may take back the Vehicle from you and you must pay to us:
a) all instalments and other sums which have become payable by you to us under this
agreement, and
b) the outstanding balance of the Total Amount Payable, less:
(i) any Option to Purchase Fee and any rebate of charges to which you may be entitled and;
(ii) any money we receive from selling the Vehicle after we have deducted the costs of recovery, insurance and storage.


This is what is stated on the HP agreement t & c's

Can't see anything there that requires any action by you.

It's arguable that this doesn't give them any right of action against you - not that they would take it anyway. As DD said

they could terminate the agreement. In practice I have never seen this happen if someone continues to make the payments.

chrisp1968

I really appreciate all the help that has been provided. Thanks everyone :-))))))