Car debts, are they wiped the same as normal debts?

dekaspace

Not me by the way, I have never drove in my life.

I have a friend who a few years back was sectioned after a bad period in his life with multiple close family deaths and turned to drink for a short period and never fully recovered and was out for work for over 18 months due to the health and now can only work part time.

He said its almost 6 years till his last payment, its about £3500 he still owes. He is in a financial state at moment.

Scotland by the way.

A_Lert

I think regardless of the legal details, your friend is quite likely to lose their car if they go bankrupt.



If the loan is secured against the car, which is usual, then it's not covered by the bankruptcy but the lender can repossese the car if payments are not paid. If the loan is not secured against the car then it will be sold to pay off the debts. (In Scotland a car of value under £3000 can be kept, his is obviously above that).


If he racked up the debts while he was mentally ill, creditors may be willing to write them off or come to an agreement as part of a voluntary code of practice.

dekaspace

A_Lert wrote: »

I think regardless of the legal details, your friend is quite likely to lose their car if they go bankrupt.


If the loan is secured against the car, which is usual, then it's not covered by the bankruptcy but the lender can repossese the car if payments are not paid. If the loan is not secured against the car then it will be sold to pay off the debts. (In Scotland a car of value under £3000 can be kept, his is obviously above that).

If he racked up the debts while he was mentally ill, creditors may be willing to write them off or come to an agreement as part of a voluntary code of practice.

He doesn't own the car anymore, it was wrote off a few years ago after he collapsed at the wheel due to his health issues and insurance was paid out which he used to live off after he was unable to go back to work.

foxy-stoat

When did he last knowledge the debt, last payment for example?

sourcrates

dekaspace wrote: »

He said its almost 6 years till his last payment, its about £3500 he still owes. He is in a financial state at moment.

Can you just clarify, has it been 6 years since his last payment, or 6 years until he`s due to finish paying for it, your post is unclear ?

I`m going to assume its the former, in which case the limitations period in Scotland is 5 years, so if no payment or written acknowledgement has been made in those 5 years, the debt will now be extinguished, and he will not have to pay it.

The same will apply to any other debt he may have.

dekaspace

Oops sorry I mistyped I meant 5 years since he last paid as of April this year, so they have a few months to chase it up I was thinking of 6 years in my head.


Its hard typing in second hand information.