Car on Hp, what happens when doing a DRO?

AG47

If somebody has a car on HP, what is the procedure when applying for a DRO?

Do you have to give the car back first, then put the rest of the debt down, or should you keep the car during the application, and then give the car back after it has gone through and you hear back from them?

AG47

Can anybody give me an answer to above question?

Can somebody start the Dro while still driving the HP car?

Oakdene

Citizens_Advice wrote:

If you've got a vehicle you're paying for on a hire purchase (HP) or conditional sale agreement, it won't be counted as an asset. This is because it doesn't belong to you until you've made all the payments on the agreement. However, you may not be allowed to keep making the payments while the DRO is in force.


Even if you're not behind on HP payments, your lender may be allowed to re-possess your vehicle anyway. This is because some HP agreements include a clause which automatically lets the lender end the agreement and re-possess your vehicle if you enter any kind of formal insolvency arrangement, including a DRO.


If your car is subject to a Motability HP agreement, you may be able to transfer to Motability's lease hire scheme instead.
Check with your DRO adviser, who can help you work out whether getting a DRO would mean you would lose your vehicle.

Taken from https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-relief-orders/debt-relief-orders-explained/how-income-debts-and-belongings-are-assessed-for-a-debt-relief-order/

AG47

Oakdene wrote: »

Taken from https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-relief-orders/debt-relief-orders-explained/how-income-debts-and-belongings-are-assessed-for-a-debt-relief-order/

Thanks for post but we still don’t really get it. I’m helping somebody and he has decided to go ahead and apply while still driving the hp car.

Hope he won’t regret it.

He will give it back as soon as he is told to.

fatbelly

AG47 wrote: »

If somebody has a car on HP, what is the procedure when applying for a DRO?

There are several pages on this in the guidance to intermediaries. There is not one procedure.

His intermediary will be able to run through the options.

The options will depend on

(a) whether there are arrears on the HP or he is up to date
(b) whether the value of the car (as valued on Parkers guide) is more or less than £1000