Engagement Ring

butternut86

Please could anyone help

In September I bought my girlfriend an engagement ring on interest free finance, could anyone please advise, if I go bankrupt would I need to return the ring? I haven’t proposed yet so it’s still in my possession. I pay £38.00 a month and when I checked my credit file last week, the finance agreement isn’t showing on my record. Does this mean the OR will find it or not?

BN86

Minkym00

Not all credit reports show the same thing. You could run one on Equifax and then another on Experian and they won’t match. So, first off, don’t assume they won’t know. Secondly, they can look at your bank statements and see the payments being made. Thirdly, it is not a good idea to lie to the OR!

So, let’s assume they’ll know about the ring. You won’t be able to pay finance agreement as the debt will vest in your bankruptcy. What happens next depends on a few things. Have you checked the Ts and Cs on the finance agreement? What does it say about defaulting on the payments? If it says you will have to return it then you will. If there is nothing in the Tc and Cs then, if the ring is worth £500+ then it is an asset that will be claimed by the OR and sold for the benefit of your creditors, and any shortfall on the finance will vest in your bankruptcy. 

You should also need to consider the fact that you took out credit prior to bankruptcy as there could be a misconduct allegation of obtaining credit whilst insolvent. But this would depend on timing and the value of the new credit compared to the total debt.

[Deleted User]

As a side issue, might not be a good idea to start married life off as a bankrupt either.
May I dare suggest that you delay making the proposal until your financial affairs become clearer? 

MEM62

Sleazy said:

May I dare suggest that you delay making the proposal until your financial affairs become clearer? 

Or the OP should at least wait until they have finished school. (Half-term japes methinks)

butternut86

MEM62 said:

Sleazy said:

May I dare suggest that you delay making the proposal until your financial affairs become clearer? 

Or the OP should at least wait until they have finished school. (Half-term japes methinks)

Sleazy - it may be half term but no jape.

The T&C for the finance agreement (with V12) states:

If (a) you fail to pay the arrangement fee or any monthly payment on its due date; (b) any information about you which you provided proves incomplete or inaccurate; (c) you die; (d) steps are taken for a bankruptcy order to be made against you; or (e) you take steps to enter into a debt management plan or voluntary arrangement with your creditors, we shall be entitled, after the expiry of proper notice, to demand immediate payment of all amounts you owe under this agreement.

I have interpreted this to mean I don’t need to return the ring they will just chase payment however it will be included in the bankruptcy so nothing they can do? 

Does anyone see anything different?

On_my_way

It sounds like it might not be in your interests at all to go bankrupt- can we help you to salvage the situation?

Dave Ramsey baby steps work really well.

Minkym00

Then the OR will claim is an an asset in your bankruptcy. They will see the payments on your bank statements and make enquiries of V12. By not declaring it you are committing a civil misconduct and there are civil penalties. 

No-one here is going to suggest you lie to the OR.