Car on Finance

R9251

I received my Bankruptcy Order today and will have the Official Receiver telephone interview or meeting to occur shortly. I have a question and as i'm new, please point me in the right direction, if the question has been asked before.

I have a car on Finance (£6000 retail value, but £8000 finance etc). I need it to get me to work, 30 miles each way, every day. There is no equity in the car, as it's a recent asset. I also have no means of obtaining any other car, no matter if only cost £500.

Has anyone had a similar situation and been allowed to keep the car (and continue paying the finance) or has the Official Receiver or Finance Company, taken the car off you, leaving you unable to get to work?

National_Debtline

Hi R9251 and welcome to MSE,


If the vehicle is subject to a conditional sale (hire purchase/ personal contract purchase) agreement, then you don't own the car until the final payment is made and will need to check the terms and conditions of the agreement about what happens in an insolvency situation. Unfortunately, going bankrupt may mean the contract is terminated and they can collect the car.


If the finance company allow you to keep the car, then the next hurdle is the official receiver. Normally the payments would not be permitted, as that could reduce/ prevent you having an Income Payment Arrangement. Unfortunately in that situation, you may find that the car falls into arrears and is repossessed for that reason.


You can explain to the OR that the car is essential and ask them to permit the payments. Stress to them that if they don't you could lose your employment meaning that an income payment arrangement is even less likely; but I am afraid it would be at their discretion.
Laura
@natdebtline

R9251

National_Debtline wrote: »

Hi R9251 and welcome to MSE,


If the vehicle is subject to a conditional sale (hire purchase/ personal contract purchase) agreement, then you don't own the car until the final payment is made and will need to check the terms and conditions of the agreement about what happens in an insolvency situation. Unfortunately, going bankrupt may mean the contract is terminated and they can collect the car.


If the finance company allow you to keep the car, then the next hurdle is the official receiver. Normally the payments would not be permitted, as that could reduce/ prevent you having an Income Payment Arrangement. Unfortunately in that situation, you may find that the car falls into arrears and is repossessed for that reason.


You can explain to the OR that the car is essential and ask them to permit the payments. Stress to them that if they don't you could lose your employment meaning that an income payment arrangement is even less likely; but I am afraid it would be at their discretion.
Laura
@natdebtline

Thank you for this, it's what i broadly understood. The irony, is if either the OR or Finance Company take the car, I cannot get to work and earn any money that i'd gladly let the OR take or pay the finance company. As a bankrupt, with £7.31 to my name, i can't even buy an old banger for £500. If i'm not allowed to stay in work and maintain payments on the car, then i have nothing.

PersianCatLady

R9251 wrote: »

I received my Bankruptcy Order today and will have the Official Receiver telephone interview or meeting to occur shortly. I have a question and as i'm new, please point me in the right direction, if the question has been asked before.

I have a car on Finance (£6000 retail value, but £8000 finance etc). I need it to get me to work, 30 miles each way, every day. There is no equity in the car, as it's a recent asset. I also have no means of obtaining any other car, no matter if only cost £500.

Has anyone had a similar situation and been allowed to keep the car (and continue paying the finance) or has the Official Receiver or Finance Company, taken the car off you, leaving you unable to get to work?

Why did you RECENTLY get a car on finance if you knew that bankruptcy was likely?

TheGardener

PersianCatLady wrote: »

Why did you RECENTLY get a car on finance if you knew that bankruptcy was likely?

Not a helpful post. This board is for support and advice.

TheGardener

As @natdebtline says, it will be a challenge to keep the car for a number of reasons. However, if the OR is aware that the only way you can work in your current job is to have a car, you may be able to negotiate.

JCS1

What type of finance is it?

System

R9251 wrote: »

As a bankrupt, with £7.31 to my name, i can't even buy an old banger for £500. If i'm not allowed to stay in work and maintain payments on the car, then i have nothing.

Given that you'll no longer have loans, credit cards and other debt repayments to make you'll find you'll be able get together £500-£1000 quite quickly.

PersianCatLady

Actually I think it is important for people to be more mindful of their circumstances when applying for credit.

The OP took out finance on this car when he knew there was a possibility of bankruptcy and now expects to be able to keep the car.

I don't think he seems to realise just how serious bankruptcy actually is.

srg0916

Although bankruptcy is serious and I agree that people don't seem to take much notice of their circumstances when applying for credit. I would say the issue which is even more important is the fact that people can obtain credit without much hassle. For e.g. the last loan I took out approx 3 years ago ( i went BR April this year) I took it because i thought i could manage but not once did the lender ask me about my employer, only asked do I work? The lender actually gave me £27500 within 5 mins of completing the application online. Desperate people do desperate things. I would say give this person some slack and concentrate more stopping these lenders, lending money to people who clearly are desperate and taking more credit isn't going to help them, instead show them another way out of their situation with factual debt advice. (sorry for going all crazy, a couple of posts on this thread got my goat a bit..) anyways...
I really hope you get sorted with the car. If you explain to the OR about your situation they may say you are able to get a car but most probably will have to give up your current car. I would maybe suggest seeing if family or friends ca lend you the money for the car in the meantime (don't mention that to the OR obviously) if not then it might be a case of trying to save to buy a little runaround for the time being.. either way hope it works out. Remember you have done the right thing and it will all come good in the end.

R9251

PersianCatLady wrote: »

Actually I think it is important for people to be more mindful of their circumstances when applying for credit.

The OP took out finance on this car when he knew there was a possibility of bankruptcy and now expects to be able to keep the car.

I don't think he seems to realise just how serious bankruptcy actually is.

Actually, what's more important than that, is your ability to consider all possible circumstances, before opening your mouth in a derogatory manner. I wasn't reckless in my decisions, my partner was killed abroad with the Military. I'm sure when anyone, takes out credit, they don't decline the option, just in case their partner dies.