Need some advice re. DRO and hire purchase

Positivesteps

Hi everyone,
Been lurking for a long time now and it's finally time for me to get sorted.
I've been burying my head in the sand for too long and I cannot carry on like this.
I am in around £9000 debt, including priority debt.
It's got to the point where I've got bailiffs attending and I can't sleep at night. Ive spent months looking into solutions and I really feel that a DRO is the best option for me.

I'm pretty sure I fit the criteria apart from the fact that I have a car on a conditional sale agreement which I believe is pretty much the same as hire purchase.
My issue is that I really need the car as I'm currently a community nurse so I need the car to work as well as run my 2 young children around.
According to parkers, my car is worth 3445, so above the £1000 threshold. My question is, is there anyway I would be able to enter a DRO and keep the car?

From what I've read it looks unlikey it will be an allowable expense, but I was hoping my Dad would be able to pay the monthly car payment (he has already agreed to this if it comes to it). My question is, if he took over paying for the car, would car insurance, tax, and petrol etc, be an allowable expense?

Sorry if it's complicated, I just want to know where I stand before I try to apply.

Thanks in advance!

National_Debtline

Hi there and welcome to MSE,


So, as the vehicle is worth more than £1000, I am afraid the monthly payments to the car will not be an allowable expense. This means they are excluded from your budget, so in order to qualify for the DRO you need to have less than £50 per month for your debts (before making the car payments).


It is possible, if the agreement is up to date, for you to exclude the hire purchase agreement from the DRO and it won't contribute to the £20,000 limit. In order for the agreement to continue you can pay the payments from your surplus (although that is unlikely to be enough) or get a third party to take over the payments - which you say your dad is prepared to do. Ideally the agreement would be transferred into your dad's name, but this isn't essential and would be up to the finance company.


A couple of potential pitfalls to be aware of if you do this. First of all, if the agreement falls behind during or after the DRO, and if the car is handed back or repossessed with further liability, it will not be written off as part of the DRO. And, second of all, if the agreement is due to end whilst the DRO is in place, and the car is worth more than £1000 at that time, it would risk the DRO being revoked as you no longer meet the criteria.

Best thing to do would be to contact one of the free debt charities to be assessed in more detail before doing anything with the car. And to get advice about any bailiffs that you have. The golden rule with most bailiffs is don't let them in, lock the doors and hide your assets - and they can't do much if you do this. However, you should get more advice as this can vary if they have been inside before or if they are chasing things like court fines.


Laura
@natdebtline

fatbelly

Laura's advice is good.

Re your specific questions - would car insurance, tax, and petrol etc, be an allowable expense?

Yes, those would be your transport costs just as if you were running a car owned by someone else (which in effect you are). The etc would be maintenance/MOT costs and breakdown cover, reasonable parking or toll costs.

I had a client whose daily commute included a ferry crossing, so that went in!

Any more questions - please ask.