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Car Finance Bankruptcy | Uk Bankruptcy Solutions

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Car Finance Bankruptcy | UK Bankruptcy Solutions

Car Finance and Bankruptcy-Can I keep my car on finance in bankruptcy? Remember finance companies are generally risk motivated and although a vehicle on finance is a secured asset the reality is that the finance companies usually have negative attitude to cars on finance. Cars on lease are a different story.

So not usually is the answer, it depends on circumstances. usually the answer to this is ‘No’ as the Official Receiver would view the monthly payment as a likely source of revenue for an Income Payments Agreement or IPA. Nobody at the Insolvency Service will admit to it, but getting a monthly payment in place for the next 36 months is a priority, as it helps offset costs. Believe it or not, the Insolvency Service runs at a loss when it comes to bankruptcy.

Having said that, we have known some exceptions. For example, if the loss of a vehicle on finance would directly result in somebody losing his / her job e.g. an area representative, there is a chance it would be allowed. We come across  cases where people have a need where public transport is not available or school runs where a car at a value of circa £1500.00 is essential, or a vehicle is necessary for employment or self employed income generation would be affected without a vehicle therefore exceptions can be made.

The Official Receiver cannot impose any restrictions or conditions that might directly affect an individual’s ability to make a living. However, when it comes to cars on finance, it really is a roll of the dice and the percentage call is that the vehicle will be lost. The usual outcome is that the Official Receiver writes to the finance company and asks for final settlement figures and these are included in the bankruptcy.

The general rule of thumb when it comes to vehicles in bankruptcy is that you can retain them provided a) you need it for work or you are a carer and b) the value does not exceed £1,000.

Car finance and bankruptcy’ is just one of hundreds of questions we’ve answered over the years, but feel free to call us on 01425 600129 if you need to know more or specifically need bankruptcy help. Our staff are ex-financial services and have the experience to get you the best result every time.

 

Bankruptcy UK

Bankruptcy UK