Bankruptcy and direct debits!

Siobhan7

Hi! I was declared bankrupt in August last year. I’ve just gone to renew my car insurance as it’s due next month only to be told I can’t pay in monthly instalments (which I’ve been paying every month without fail since the bankruptcy!)

I don’t know if it is the bankruptcy or just this being a new rule across the board (the advisor didn’t know)

I’ve not had any issues setting anything up using direct debit before now... I’m just wondering if this can be anything to do with the bankruptcy before I go absolutely crazy with the complaint? (As you can imagine I’m pretty angry! I now have to sit and sort out new car insurance!)

d123

Siobhan7 wrote: »

Hi! I was declared bankrupt in August last year. I’ve just gone to renew my car insurance as it’s due next month only to be told I can’t pay in monthly instalments (which I’ve been paying every month without fail since the bankruptcy!)

I don’t know if it is the bankruptcy or just this being a new rule across the board (the advisor didn’t know)

I’ve not had any issues setting anything up using direct debit before now... I’m just wondering if this can be anything to do with the bankruptcy before I go absolutely crazy with the complaint? (As you can imagine I’m pretty angry! I now have to sit and sort out new car insurance!)

Paying monthly constitutes a loan, very few lenders are willing to offer loans to undischarged bankrupts.

Siobhan7

But how come I’ve had no problems until now? I’ve had loads of direct debits and started quite a few. I don’t understand.

TheGardener

d123 is right I'm afraid - paying your insurance in instalments constitutes a loan and its pretty common for BR folk to have to pay up-front for car insurance and has always been the case. Its not the DD that's a problem, its the fact it's a loan. Most DDs are not loans - they are 'pay as you go' for things like utilities and rent.

If you were not in arrears with the insurance payments then its unlikely that the OR would have contacted your insurers so they wouldn't have know you were BR until they did your renewal and may have done a credit check at that point.

It also advisable to check that your insurer doesn't have a clause about voiding policies if the holder went BR. I did an online comparison and they didn't charge me more but I rang the company I chose to double check there was nothing hidden in the small print.
Once I started paying up front, I kept doing it that way - its cheaper. Not much consolation when you haven't budgeted for it though