Bankruptcy Advice

[scottyjaxx]

Hi all,

 

I've got a total of about 50k debt and I'm currently in an IVA where it has been agreed that I pay back about £22k over 5 years. After about a year of payments on the IVA I got made redundant at work and my payments were put on hold. They have been on hold for about 8 months now and I had a letter telling me that they had cancelled my IVA agreement. I got a new job in December but the pay is nothing like I was earning before and can't even afford to live let alone pay back the IVA too which is £370 a month. So it looks like I have no choice than personal bankruptcy. I'm fine with this and to be honest it feels like it could be the best option for me.

 

My main question really....and the reason for finding this site....is I only really have 1 asset which is my car. It's worth about 4 or 5k. The thing is I really can't be without a car as I need it at the weekends to see my children. I was guessing that if I declared myself bankrupt that they would take my car for auction. Is this true?? Is there a bottom limit on how much a car is worth before they can take it from you....for example...would it be worth me selling the car I currently have and then buying one for around £1500>?? would I stand more of a chance of holding onto a car then??

 

I'd be grateful for any advice on this....thanks in advance.

[spamheed]

Hi all,

 

I've got a total of about 50k debt and I'm currently in an IVA where it has been agreed that I pay back about £22k over 5 years. After about a year of payments on the IVA I got made redundant at work and my payments were put on hold. They have been on hold for about 8 months now and I had a letter telling me that they had cancelled my IVA agreement. I got a new job in December but the pay is nothing like I was earning before and can't even afford to live let alone pay back the IVA too which is £370 a month. So it looks like I have no choice than personal bankruptcy. I'm fine with this and to be honest it feels like it could be the best option for me.

 

My main question really....and the reason for finding this site....is I only really have 1 asset which is my car. It's worth about 4 or 5k. The thing is I really can't be without a car as I need it at the weekends to see my children. I was guessing that if I declared myself bankrupt that they would take my car for auction. Is this true?? Is there a bottom limit on how much a car is worth before they can take it from you....for example...would it be worth me selling the car I currently have and then buying one for around £1500>?? would I stand more of a chance of holding onto a car then??

 

I'd be grateful for any advice on this....thanks in advance.

 

Hi and welcome to CAG,

 

You are correct in your assumption regarding the possibility of the sale of your vehicle, if it is deemed to be an asset then the OR would sell it and use some of the proceeeds to settle your debt.

 

A personal vehicle (car, van or motorcycle) is allowable during BR and I would reckon the ceiling value should be no more than about £1000 in order to guarantee avoidance of the OR's interest.

 

Be aware that when you sell your vehicle, the proceeds must be accounted for.

 

The vehicle must be sold for a reasonable (market value) sum

The disposal of the proceeds of the sale must be accounted for (to the penny)

 

If the OR feels that the sale is a deliberate attempt to avoid your liabilities, or is in any way underhand or evasive, they have the power to reclaim the vehicle and hold you liable for the financial implications, this can also have an impact on any sanctions which may be applied to your BR (the amount you may have to pay out of your disposable income)

Edited April 6, 2010 by spamheed

[rapterman]

It really depends on what the car is needed for.

 

Do you need it to get to work?

Do you need it to see your children?

Do you need it due to a medical or disability?

 

The key word here is "need" not use.

You maybe asked if it's not possible to use public transport.

Check out if any of your journeys have public transport and how much they would cost vs the running of the car.

I worked out that for me to get to and from work would cost me the minimum of £220 per month and at least triple the time to and from work!

 

Check out the value of your car at New & Used Cars, UK Car Dealers - Parker's, as a guideline the OR uses the "poor value".

 

Another CAG user "Socktug" has recently went through the BR process and he was allowed to keep his car as it was under 4K, http://www.consumeractiongroup.co.uk/forum/show-post/post-2789332.html

I have just filed and i'm due in court shortly, my car is under 1000 so i'm fairly sure it will be safe, depends on the OR I guess!

Edited April 6, 2010 by rapterman

[debtinfo]

Hi, just to add that if as the obove posters decides that you need your car but it is just worth to much then what they usually do is put the car through auction and give you £2,000 back to buy a cheaper car, so there really isnt a need to sell it beforehand

[stewpots]

A personal vehicle (car, van or motorcycle) is allowable during BR and I would reckon the ceiling value should be no more than about £1000 in order to guarantee avoidance of the OR's interest.

 

 

Its usually £2,000 but depends what its for

 

If its for work /see kids it all helps

 

A car that breaks down (cheaper is of no use)

 

Depends if your kids are 3/4yrs old or 20yrs old.

 

If you car is worth £5,000 they may ask you to get a cheaper one and I wouldnt mention the Bentley

[welshcake]

Don't sell your car privately it wil only bite you in the bum, Explain your needs and I am sure having dealt with the OR's they are very helpful and will come to an arrangement.

[loobyloo85]

If your vehicle is worth less than £2K, the official receiver would let you keep this. Also, if you need the vehicle for good reasons, then the OR would also look favourably on this.

[spncrpaulj]

When I declared myself bankrupt in 2006 I had a car valued at around £4-5k.

I was lucky because of the distance and traveling time to and from work I was allowed to keep it.

 

 

It's been 3 years since I have been discharged from bankruptcy, up until aquiring my credit file from Experian a few months ago I had been finding it very difficult to even open a bank account

 

Keep an eye on your credit file after you are discharged although your offical receiver writes and informs all of your creditors.

My creditors still had all of my debts listed as defaulted showng an owed balance.

They should have read defaulted satisifed which they all do now.

 

I find this site really helpful and hope the above helps you a little

[paulmac]

I have just been told by Reveiver that as long as vehicle is not worth more than £3000 it will not be touched and has now been made exempt.

Im no expert but thought i would mention it as i was told this yesterday

 

Sorry if its not what you wanted to hear.