Bankruptcy & being real

Londonuk78

Good morning,

So finally I have to be real. My only option is bankruptcy.

Divorce from my husband has finally broken me.

I have mounts of debt, can never repay it.
Here is my question:

I have a car on HP all up to date, costing me £150 a month, same price as the train. I need the car to go to work and client visits but mostly due to I can’t walk far due to medical issues.

I rang my HP lender who said: if you are bankrupt we are happy to let you keep the car and continue the payments as normal as you never had arrreas.

Who will that sit with the receiver? Will he approve.

Thank you , and what a great forum. No judgement or embarrassment just a really good informatively place.

Cheers.

Ogden

Hi there

It will depend on the value of the car

bewildered1

I don't imagine the OR will allow you £150pm to pay for a HP agreement. After all, all credit agreements become null and void at the point of bankruptcy and to continue paying one creditor when you've stopped paying others can be seen as an avoidable preference and is not allowed.

However, you state that it would cost you £150pm to use public transport to commute to work. This would be an allowable cost if it could be proven that a cheaper alternative could not be found. You could then use that money to pay for your HP agreement. But then you would have to find the money for fuel, servicing, insurance etc. The OR wouldn't allow you this because they would be under the assumption that you'e using public transport. You would have to find this money from savings made from other expenses. For example, if the OR allows you to have £300 for groceries but you only spend £250 you can spend the remaining £50 on your car.

The only other option is forfeit the car and buy another one. The OR will allow you £1000 to buy it plus reasonable expenses for fuel etc if it can be proven you need one.

National_Debtline

Hi there


It is possible to keep a car on HP when you are made bankrupt, but only if you have the agreement of both the finance company and the OR. The OR will have to accept that the car is essential either to do your job or for your domestic needs. They also need to be satisfied that a HP car is the best option, taking into account factors like the value of the car, monthly payments and running costs.


Unfortunately it is difficult to give you a definitive answer, it really is going to be down to the OR to decide.


Best wishes


Susie
@natdebtline