We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

CVL then Bankruptcy - Car worth less than HP outstanding

Thoughts very welcome. My company is insolvent and is presently going through a CVL. I have no significant assets I think, however, many of the company debts are personally guaranteed, so bankruptcy is next. 

I am going to be a contractor for another company (not mine) with a Weekly income of £650 - I have a Monthly military pension of around £300 

Car is on HP and the settlement figure is £11,700
It has done over a 123,000 miles and webuyanycar have it valued at £9,800
I need a mile muncher for work.
What if any are the options to keep the car?

Thanks.

Comments

  • MEM62
    MEM62 Posts: 5,206 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    If the loan is secured on the car you will likely loose it as your bankruptcy will prevent you from keeping up the payments.  
  • MEM62 said:
    If the loan is secured on the car you will likely loose it as your bankruptcy will prevent you from keeping up the payments.  
    Thanks, that makes sense.
  • Minkym00
    Minkym00 Posts: 790 Forumite
    Sixth Anniversary 500 Posts Name Dropper
    It's not quite as simple as that. The car is not an asset as there is no equity in it, therefore the Official Receiver will disclaim it. If the monthly repayments are reasonable then the OR will likely allow them as an expense. It then becomes a matter between you and the finance company. If the finance company doesn't care that you're bankrupt as long as you to continue making the payments then you carry on, and keep the car. Some finance companies consider a bankruptcy as a breach of their terms and will repossess. The car is then sold and the shortfall becomes another bankruptcy debt. So there is no hard and fast answer.    
  • Minkym00 said:
    It's not quite as simple as that. The car is not an asset as there is no equity in it, therefore the Official Receiver will disclaim it. If the monthly repayments are reasonable then the OR will likely allow them as an expense. It then becomes a matter between you and the finance company. If the finance company doesn't care that you're bankrupt as long as you to continue making the payments then you carry on, and keep the car. Some finance companies consider a bankruptcy as a breach of their terms and will repossess. The car is then sold and the shortfall becomes another bankruptcy debt. So there is no hard and fast answer.    
    Many thanks, that gives me some hope that I can keep the car, I will request an arrangement from the OR and the finance company, fingers crossed. Cheers.
  • How did you go on with this? 
  • 3Commando said:
    How did you go on with this? 
    Well... I've been trying to get the company with the black horse emblem to take the car, as I've got a cheap car to get to work. The HP company refused to take it back without my paying a substantial collection fee.

    I have now SORN it, and it is not insured and sitting on the drive. I have made a couple of formal complaints as to why they refuse to pick the car up and am waiting to see what happens now.

    Just a mess at the moment. 
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 349.2K Banking & Borrowing
  • 252.5K Reduce Debt & Boost Income
  • 452.8K Spending & Discounts
  • 242.2K Work, Benefits & Business
  • 618.8K Mortgages, Homes & Bills
  • 176.2K Life & Family
  • 255.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.