DRO and Car

[Deleted User]

I am going to shortly enter into a DRO (presuming it gets accepted) but I am unsure what to do regarding a car. Currently I have a car worth about 3000 with about 5000 outstanding…..presumably I can’t keep this car and keep making the payments? If not, can I simply ask the HP company to come and get it and tell them what I’m planning or do I have to go through the indignity of repossession? 

MalMonroe

Hi, this is what Citizens Advice says -

https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-relief-orders/debt-relief-orders-explained/how-income-debts-and-belongings-are-assessed-for-a-debt-relief-order/

Cars are not supposed to be worth more than £2k but as the info in the link says, do discuss this with your adviser. Doesnt have to be a Citizens Advice adviser either. 

I've been through a DRO and would always advise people to go through one of the free debt help agencies, if they aren't already doing so. I used *StepChange and they were brilliant. When I applied, we were only allowed to have a car worth up to £800 and fortunately I had an old banger worth around that, so it was fine for then. But have a word with an adviser and see what they advise. 

*There's also Citizens Advice and National Debtline.

fatbelly

Unless there are unusual circumstances the HP payment would not be an allowable expense.

Getting a third party to make the payments would be acceptable to the DRO team but there could be a problem if the account remains in your name and the agreement completes within the 12 months

Because of the way a DRO is set up I would recommend terminating the agreement now and getting a final value of the sum owed to the HP company, to put in the DRO.

If taking the HP expense out of your expenditure results in a surplus income >£75, or if adding the HP debt takes your total debt >£30000, then you need to discuss this with your DRO intermediary.

[Deleted User]

Ok thanks, I think it’s best to just get it settled and cleared with the DRO….I don’t want to come out of it still
owing money on HP

fatbelly

Yes get it terminated. Get the figure (which may take a couple of months), then put it in the DRO, assuming you still qualify.