Buying a Vehicle Whilst Bankrupt

Bernard_Nurse

Hi

I am bankrupt who has a few months to go until discharge, who is reliant on their vehicle to get to work etc.

Unfortunately, this recently broke down and as it needs a new engine (and was only worth a few hundred in the first place), is beyond economical repair

I am currently borrowing a car from someone but they will need this back soon.

A friend has offered to loan me the money for a replacement vehicle on the basis that I repay them at a rate of anything up to maximum of £100 a month once able to do so, something I cannot currently do due to having no spare money after I've covered my 'reasonable expenditure'.

I am however hoping to get a pay rise in the near future. That and I'm looking for a better paid job regardless.

So my questions are:

1. Will the OR be ok with me buying another vehicle in this way and if so, can they set a cap on how much I can spend on one?

(I say this with it in mind I may never pay a penny back until after discharge).

2. If my income increases before discharge to the point there is a surplus of more than £20 a month, my intention would, as above, be to commence repayment of the money my friend had lent me.

Is the OR likely to have a problem with this?

I would be looking to replace my current vehicle with something similar in terms of running costs, if not better.

:beer:

Minkym00

1. The OR can’t/won’t stop you borrowing money. As long as your friend is aware that you are bankrupt then you are doing nothing wrong. Inform them what you are doing though as they may possibly want proof of tax and insurance as your trustee.

2. If you need any spare income to buy a car then it would be seen as an allowable expense. If you state that you need it to get work, for example, then you can argue that it’s essential. Be prepared for a reassessment for an IPA though.