Some advice needed before going bankrupt

KleoJeyyy

Hi, my partner is considering going banktupt as he got 20k of depts that he is unable to pay and we are expecting a baby in 2 month. We are not married. For the car we have got he is the registered keeper and I am additional driver, but I paid for it 6 years ago (took a loan). I do not have the invoice, all I have is the loan agreement on my name that i took on the day we bought the car, which states that money has been paid to carcraft which was the previous registered keeper of the car. The loan was not secured against car though. Is there a chance that they will take the car to pay his depts? Also mortgage is on my name only  if we are not married I assume they wouldnt touch that and any of my finances?

fatbelly

He couldn't do a DRO, could he? Needs debts under 20k and surplus income under £50 pr month.

KleoJeyyy

Hi Fatbelly,

Thanks for the reply. I am unsure, we spoke to an advisor, gave all the income details & expenses & he suggested going bankrupt. The depts are just under 20k though.

KleoJeyyy

Wouldnt it be the same situation with car? I just want to check what are the chances it could be taken away?

sammyjammy

How much is the car worth?  Conservatively

KleoJeyyy

It is worth around 5k now. I bought it for 15k 6 years ago, but finance was for 20k, its all paid off now. Would loan agreement be enough as proof that i paid for it? It wasnt secured against car though l. But the loan company paid out carcraft which was former keeper of car on the day we bought it.

fatbelly

In a DRO, you talk to your intermediary. Do you own a  car? No, my partner owns one that I use. Can she prove she owns it if asked? Yes she can.

That's as far as it will go.

It's very unlikely that it will be investigated further but the worst case is that it is found to be yours and the DRO fails.

In bankruptcy it's a similar conversation with the Official receiver. It's more likely that it will be investigated further and if it is found to be yours you lose the car.

Who did the adviser work for? Stepchange? What did they say about the car and the house situation?

sourcrates

If you are the owner, the car is safe, but there may be a problem with beneficial interest in the house, bankruptcy may not be the answer here.
If you pop over to debt free wannabe and post your statement of affairs, we can see if there is a better option.

KleoJeyyy

Great thank you Fatbelly & Sourcrates for the advice. I think we will try our chances with DRO as there is less risk and see how that goes. Will speak to another advisor beforehand though to see how to apply for it etc.

fatbelly

The weird thing about the house is that a DRO intermediary is likely to be more concerned about possible beneficial interest than the OR in bankruptcy.

Let us know how you get on