Last few questions ........

scaredwitless32

Hi,
After our recent appointment with a CAB, I came away with a feeling that the advice we were given was wrong, please dont think I presume that i know more than he does, its just the advice that was given didnt 'sit' well ! I dont want to go into details on a public forum, I have taken advice/ opinions of a couple of other members here, who, take the same or similar veiw to me. Perhaps its just my paranoia as I am worrying about every little detail now, but I just wondered if anyone can clarify the following,

1) If the OR is very ruthless and takes our banger of a car, which only has a value of around £200, does he/she HAVE to offer it back to the BR(if we confirm to him our interest quickly) or a family member to buy? Or is he/she quite within their rights to just flog it or even scrap it?:eek:

2) Are child tax credits counted in the total income?

Thanks to anyone who can answer this and I promise NO more questions from me!!!!!!!:o

regards
SW

skylight

scaredwitless32 wrote: »

Hi,
After our recent appointment with a CAB, I came away with a feeling that the advice we were given was wrong, please dont think I presume that i know more than he does, its just the advice that was given didnt 'sit' well ! I dont want to go into details on a public forum, I have taken advice/ opinions of a couple of other members here, who, take the same or similar veiw to me. Perhaps its just my paranoia as I am worrying about every little detail now, but I just wondered if anyone can clarify the following,

1) If the OR is very ruthless and takes our banger of a car, which only has a value of around £200, does he/she HAVE to offer it back to the BR(if we confirm to him our interest quickly) or a family member to buy? Or is he/she quite within their rights to just flog it or even scrap it?:eek:

2) Are child tax credits counted in the total income?

Thanks to anyone who can answer this and I promise NO more questions from me!!!!!!!:o

regards
SW

Answers taken from a cross section of answers/posts over the years on MSE! Bear in mind that with reference to cars, each car is (these days) taken on its own merits and depends on the OR.


But usually, £200? Is unlikely to touch anything under £1k (not impossible though!) Would cost the OR more to remove it, store it, advertise it and sell it than to just let you keep it. If you need it to get to work, they are very unlikely to touch it.

CTC is taken into account in the total income, but child benefit is not. (by the OR)

rog2

scaredwitless32 wrote: »

Thanks to anyone who can answer this and I promise NO more questions from me!!!!!!!:o

You ask as many questions as you want, sw. That's what this board is all about.

I'm not sure on child tax credits, specifically, but benefits, whilst they need to be declared, can not be considered for the calculation of an IPA/IPO.

I'm sure fermi, or someone, will be able to clarify it tomorrow.

JCS1

you need to declare all your income, so include all benefits and state the source. The OR cant include child benefit as part of your income however for the purposes of an IPA

NEIL77

hi there just letting you know i went br 2 years ago now and now i have only just found this forum gutted anyway when i went br the or said to me she was not interested in my car as it was worth less than £5000 what people must remember is that the or will not take your car off you if its worth a couple of hundred quid as it will cost him more to sell it and they know if you have to make payments to them you will need a car to work in order to do that oh and always remember one thing the or is there to help you !

whoopsydaisy

I was told (which made logical sense) that tax credits are included as income. When I asked about the child tax credit element, it was pointed out to me that most people who recieve child tax credits have an element which pays towards childcare, and childcare is included on you expenditure section. therefore meaning that it IS included as income.

As for the car, it would probably cost more than it's worth for them to try to dispose of it, and so wouldn't be worth their while for them to try to take it from you.

davidh71

My tax credits were included, which is fair enough because they pay for our childcare. I have seen posts on here saying they are not so would not want to say that is always the case.

As for our car, we had to justify our need for it, even though it is a very old car and they did not seem interested in taking it off us. I think this was mainly because of the extra expense that comes with running the car. Judging from other posts on here it does seem to depend on your OR though!

Personally I found the CAB very helpful, especially as my advisor had been through it himself. But again it is going to depend on your advisor and there is bound to be some 'less experienced' ones out there!

scaredwitless32

davidh71 wrote: »

Personally I found the CAB very helpful, especially as my advisor had been through it himself. But again it is going to depend on your advisor and there is bound to be some 'less experienced' ones out there!

Hi Please dont think that I am NOT grateful for the advice the CAB advisor gave me , I am , it was just how he responded to a certain question we asked, thats all! He was a very nice, helpful fella, that seemed to know his stuff alright, after all he said he had been with the CAB for 10yrs I guess he knows the way our OR (in our district) works, what they are hot on and what they are not. Given the fact that for the ordinary Joe Bloggs , its a HUGE step and extremely stressful, to us , his answer (after spending so much time here and on the insolvency site) seemed a little 'naughty' if you like.

Anyway, thanks to everyone for their posts/advice etc, I really appreciate the time given to answer

I have read in a posts recently, by Debt doctor, that child tax credits are NOT counted, although I would of thought they would have, doesnt matter though, I was asking out of curiosity more than anything else.

Ok, so worst case senario, our car IS seized by the OR( regardless of value of vehicle) for deffinate.............do they HAVE AN OBLIGATION to gives us or one of our family members the chance to buy the car off him/her, or have they the right to just 'dispose' of the vehicle any way the see fit, by even scrapping the car?????????????????
If someone would please just clarify this point for me, I can stop fretting for the rest of the weekend.......:rotfl:

Many thanks

fermi

Hi scared.

There are provisions for the OR to offer the car back to the bankrupt or relative at their discretion (just got round to looking;)). See:

http://www.insolvency.gov.uk/freedomofinformation/technical/techmanvol1/Ch25-36/Chapter31/part2/part4/part_4.htm

31.2.34 Sale of motor vehicle by the official receiver

The official receiver may find that it is beneficial to the estate to arrange a private sale to the bankrupt or a director of a company in liquidation. The bankrupt or director should be asked whether he/she is interested in retaining the vehicle. If so it should be put to the bankrupt/director that this may be possible provided that he or she

• can arrange for the funds necessary for the transfer of the vehicle from the estate to the director, bankrupt or third party as the provider of the funds directs. In bankruptcy the provider of the funds must be a third party, possibly the bankrupt's spouse or family member.
• can provide a current MOT certificate.
• can provide a current insurance certificate.
• can provide the vehicle's registration document.
• will sign a certificate stating that the vehicle is to the best of his/her knowledge in a roadworthy condition [Note 3]. (see paragraph 31.2.39).
• agreement can be reached on a sale price (see paragraph 31.2.35)

The private sale of a vehicle is only possible where the director/bankrupt is cooperating in full in the proceedings. It is important that the administration of the case is not delayed by the sale and that the official receiver does not have to spend an unreasonable amount of time dealing with the matter. It should be emphasised to the director or bankrupt that the provision of funds and documents needs to be dealt with as a matter of urgency and any undue delay will result in the official receiver instructing agents to remove and sell the vehicle (see paragraph 31.2.38).
The agreed price for the vehicle must be provided by way of cash, a banker's draft or building society cheque. Personal cheques are not acceptable

It would make absolutely no sense for the OR not to do so for a low value car, since they would not have to pay auction and collection costs in a private sale and so would realise more cash for the estate; but it is up to their discretion by the looks of it. Any funds to purchase the car would need to come from a third party like a relative.

Personally I can't see that there would be any problem selling the car to a relative prior to BR as long as a fair price was paid, it is declared on the forms as having taken place, and the proceeds are not used to unfairly pay one creditor over another. Might want to get a second opinion on that one from CCCS or National Debtline.

You will also need to persuade the OR that the car is necessary for your daily needs so that they allow for running costs etc in your I&E. There you would need to convince the OR that it is essential, and not just convenient. I think you already have a link to some info on that.

rog2

scaredwitless32 wrote: »

Ok, so worst case senario, our car IS seized by the OR( regardless of value of vehicle) for deffinate.............do they HAVE AN OBLIGATION to gives us or one of our family members the chance to buy the car off him/her, or have they the right to just 'dispose' of the vehicle any way the see fit, by even scrapping the car?????????????????

SW - the OR does NOT have an 'OBLIGATION', as such, to offer the chance for you, or a family member, to 'buy back' the interest in the car, as such. However, in discharging his obligation to the creditors, the OR does have an obligation to ensure that the 'realisation of assets' is performed in an honest and businesslike manner. This means that he/she must take into account the cost of realising an assett, and, in the case of your car, that cost is, realistically, going to be higher than what the actual return is likely to be. Therefore it would be economically sound for the OR to 'accept' any offer from you to purchase the car.
As far as 'scrapping' the car - this will NOT even be on the OR's agenda. The OR's job is to realise as much money from your assetts as he/she can - not to inflict further punishment on you.
Have a good weekend.

debt_doctor

This is taken from the insolvency service technical manual.It states that the high court has ruled that child benefit and similar benefits are not taken in to account as income. Our local insolvency service never takes child tax credit in to account, and quotes this section of the manual. If someone receives an IPA and has child related benefits taken in to account they should complain and ask for it to be reviewed.


This does not mean that the official receiver must exclude all benefit payments received by the bankrupt when calculating available income for an IPA. Theperson making the calculation (usually the examiner) should first consider whether there is income paid to the bankrupt not comprising state benefit . If this is the case, an IPA may be a possibility, and any calculation of income should include all available income, including state benefits which are paid to an individual for the general benefit of that individual and their family. The notable exceptions to this rule when dealing with state benefits is child benefit. The High Court has stated as a matter of public policy that child benefit and similar benefits should not be included in the statement of income when applying for an IPO and there is no reason why this point should not be extended to cover IPAs.

Best wishes