Stuck ,no way out

Elsbells81

Don't know what to do !

Due to a reduction in income I can no longer afford my DMP with stepchange they have advised bankruptcy !

I have over the weekend spoken with my parents telling them of my situation and if they would be able to help with the bankruptcy fees. . All hell has broke loose

I explained that the car that they brought for me is above the limit allowed and is at risk to which they have demanded I give them the car back as "why should the car that they worked hard for be at risk due to my stupidity "

Without the car I am now eligible for a DRO but I'm so worried that because the car has now changed owners it looks like I am deceitful and trying to hide assets which now means I can't apply for a DRO or Bankruptcy

Feel stuck , can't pay my debts , can't apply for a DRO or Bankruptcy

What to do

lisyloo

Sorry to ehar of your cituation.


Can you clarify what you mean by "bought for me".
Was it a gift and under your ownership, or did they just buy it for your use i.e. a loan.


I think you are correct to be concerned, because giving something away that is under your ownership and then declaring bankruptcy could be an issue.

Can you confirm what the arrangement was with the car and who actually owns it (I don't mean who is the registered keeper).


I appreciate you want to try to keep on good terms with your parents but no-one can legally demand back a gift. Once it's given it's yours.
I mean that in a legal sense and the way it would be viewed as part of your bankruptcy.

NotEvanAPot

Be aware that registered keeper and vehicle owner are two very distinct terms.

If your parents purchased the vehicle outright or with finance and gifted you the vehicle, it is yours. If your parents purchased the vehicle outright or with finance and gifted you unlimited use, the vehicle is theirs and still is.

Elsbells81

Last year my car stopped working ! As I needed it to get to work and do the school run my father purchased me a new car privately outright with cash .

I am the one who filled in the form (is it a VO5 not sure ) everything relating to the car comes to me !

I tax it and pay for insurance

NotEvanAPot

To me this reads as if the funds were a gift to you, in terms of the car via the seller.

Car, if over £1,000-£1,500 valuation, would be sold by OR and if you can prove a genuine need (not just want, a lack of alternatives) you would be permitted to purchase one for under £1,000 which the OR would give back from proceeds of sale.

If you want to know what your car is worth in eyes of OR, use Parkers (Google is your friend here).

Apologies this is probably not the news you wanted.

Silvertabby

As an alternative to bankruptcy, could your parents help you to keep up the DMP until you are able to find a better paid job?

Brock_and_Roll

I'm so worried that because the car has now changed owners it looks like I am deceitful and trying to hide assets which now means I can't apply for a DRO or Bankruptcy


This is how the OR will look at it, if as it appears to be the case that the OP has already transferred the ownership to parents.


Assuming a new car of say £10k and even allowing for 40% depreciation in the 1st year, it is a substantial amount of money that your creditors are potentially being deprived of here so the OR will seek to reverse the transaction if he spots it.


A gift is a gift, and even if it is something the OPs parents now regret, if they are hard working, law-abiding people they should perhaps think twice before potentially being party to a possible criminal offence under section 354(1) of the Insolvency Act 1986. Sounds extreme - but might give the OP some leverage with parents.

NotEvanAPot

The parents could not face penalty under the legislation quoted. They do however have no powers to do anything more than demand the vehicle back in the same way a child demands sweets to silence a tantrum.

Elsbells81, unless you have given a written receipt for the vehicle, an offence is yet to be committed.

lisyloo

Elsbells81 wrote: »

Last year my car stopped working ! As I needed it to get to work and do the school run my father purchased me a new car privately outright with cash .

I am the one who filled in the form (is it a VO5 not sure ) everything relating to the car comes to me !

I tax it and pay for insurance

ok, but what was the arrangement between you and your father.
Did he buy you the car, or was he just helping you out temporarily with an understanding that you'd give the car back?


We really need to know who owns the car.


Did he give it to you?