sarnyboy

i ve read a lot of threads on here about bankruptcy, and a lot of you seem to know a bit about it, if i am declared bankrupt, will they take my car..? its a 1993 wrx import, is there a value that they go by to decide this..? (i dont need it for work or anything, does that go against me?)

weslad

i think it depends who you owe money to ! , im not sure if it would work but id get the cars ownership moved to a reletive or whatever , if anyone comes knocking it no longer your car legally ! if they ask you sold it for cash or whatever ..............

KiwiGTI

They won't touch anything valued at less that £2000, the trade-in price from Parkers is a good guide.

Above that it is up to the OR - if you can prove you need it and it's £3000 you may be OK, but something like a £10,000 car they'd make you sell and get a cheaper alternative.

Do not under any circumstances transfer ownership at all to relatives or dispose of it at a cheap price to a relative or anyone else, you will probably be prosecuted.

weslad

how come they can prosecute before you,ve been declared for bankcrupcy , i understand that if you declare yourself bankcrupt and then sell stuff off its illegal but i didn,t know they could do it before ! , obviously you could owe other people money as well and need to sell stuff off befor hand , this is what most people try and do before they finally give and admit defeat isn,t it .................ps i forgot to add that the advice i have given was based on the fact that a person had not yet been declared bankcrupt ie..if you know you are going under then get rid of your gear , i understand that this might not be possable with property ect ...but a car worth a few grand may be fine..........

KiwiGTI

It's the intent that is what they look at. If it is honest and they can clearly see that you have sold assets to try and pay debts etc (although this shouldn't be done so that one creditor gets preferential treatment) then you are OK.

But if you had a £6000 car that you sold for £2000 to your mate/wife, that is clearly selling an asset at an undervalued price and effectively depriving your creditors of money. For a car they can do this for the 12 months preceding the day you get declared bankrupt. They could also try to get the asset back off who you sold it to.

They don't prosecute before bankruptcy, obviously, but when you go bankrupt they will examine all your financial affairs.

weslad

i suppose then you have to tread very carefully when doing something like i suggested ! , good advice anyway , i think you,ve answered the question for sarney boy.............

KiwiGTI

Like anything in law it can be a greyish area - and could depend on the mood of the OR on the day as well as the circumstances of your bankruptcy.

You can see all the people that have got BRO (Bankruptcy Restrictions Orders) against the on the insolvency service web site. Some interesting reading and some very blatant cases of asset disposal.

eg: Borrowing £25,000 a month before declaring themselves bankrupt but the money was "lost" by gambling, or by repaying debts in cash to overseas family members. Also people transferring £15,000 cars to their own business etc just before going bankrupt.

It's pretty dumb because if you are honest you are discharged from bankruptcy in a years time (max), for the sake of £15k or less these idiots are being subject to bankruptcy for 10 years or more.

jimboturbo

Kiwi, when you say "discharged" what exactly does that mean in terms of credit rating for example with mortgage lenders?

Jim

KiwiGTI

Nothing, apart from it might be noted on your credit rating, where it will stay for 6 years.

You can still get a mortgage but it will probably be 1-2% over their normal rates for a couple of years until you get a history with the lender.

Discharged means you are free from the restrictions of bankruptcy.

///\oo/\\\

More misinformation from Kiwi unfortunately....

They won't "prosecute" you for transferring an asset at less than its true value. You are not committing an offence in doing so.

All that will happen is that the OR or trustee in bankruptcy may apply to the Court for an order to restore the position to what it was prior to the transfer and thereafter sells the asset for the benefit of your creditors.

The decision as to whether or not to go to Court will depend on the likely net recovery after costs.

The relevant timescale is 5 years prior to the day of presentation of the bankruptcy petition.

You may be subject to a restriction order if a) the asset was of high value and b) the transaction was obviously collusive and d) no recovery was made.

What normally happens is that the party to whom the asset was transferred makes an offer to settle with the OR or the Trustee and everyone's a winner.

If in doubt please do not take advice from would be experts who glean their knowledge from the web.

KiwiGTI

More pedantic rubbish from someone who who is so full of self-importance they have copied Prince and have a symbol for a name.

Don't believe the optimistic rubbish posted above - if the OR decides that you have done anything considered dishonest, and that includes transferring or disposal of assets at an undervalued price, then they can seek a BRO against you to extend the period of bankruptcy.

Whether of not they recover the assets is irrelevant, if they see an obvious attempt to dispose of a car you will be considered dishonest and they will probably seek a BRO.

Here's some examples :

The darker side of bankruptcy - Foot Anstey Solicitors

And the relevant details :

Bankruptcy Restrictions Orders

For the ****-jockey that posted above, this is a discussion forum, not a forum for the provision of expert advice, it's an insult to the OP that you would suggest they wouldn't take professional advice.

BTW, the relevant timescales for recovery of assets depends on the type of asset - for a car it is 12 months.

dazza30

put your car in your girlfriends name or your mums whats not yours they cant touch

///\oo/\\\

Resorting to name calling now?

BTW - the "optimistic rubbish" posted above was posted by someone with 16 years of direct experience working in the industry.

I wouldn't presume to tell you your job Kiwi,so please don't presume to tell me mine, and particularly from what you read on the web.

FWIW, as with most things in life the reality of the position is somewhat different to the published guidelines. If you read the details on the websites you posted, you will note the inclusion of words such as "may" or "could" not "will" and "would".

There was nothing "optimistic" in my post. The OP was enquiring about a 1993 WRX import - not an item of significant value (no offence intended to the OP)

Indeed this is a discussion forum. Just as you are at liberty to post misinformation, I am at liberty to post correcting that.

Your posts are extremely prescriptive, considering you are merely "discussing" the point - somewhat hypocritical of you to accuse me of "pedantic rubbish"

BTW - (as you woudl expect) I have an up to date copy of the relevant legislation in front of me and for the life of me I can't find the bit that says "for cars its only 12 months"

Can you please direct me to the source of your assertion?

Cheers

fabiavrs

Also the car can mean see as a means to work thereby taking your car would further your financial hardship. This will not stand with a car worth alot of money.

I would rather than ask people on here I'd get some advice from someone who knows the law it's self unless someone here of course falls into that.

KiwiGTI

Surely as somebody who works in that area it is your duty to inform people of the prescriptive requirements, which is worst case scenario.

One could also interpret your above post as endorsement of him arranging his affairs so that he retains his car by transferring it, which is no doubt frowned upon. (presumably you're an IP)

Two definite sources of the 12 months. A phone conversation with the Insolvency service and on the statement of affairs there is this question :

Now, given the OR has access to DVLA records would you really recommend someone to get themselves in the position where they have to explain why they sold the car, where the money went and why it was sold at a knock-down price? Because you know that places them at risk of a BRO, even if they get the money/car back.

///\oo/\\\

No, this is a discussion forum and I am discussing the reality of the situation. You said he would be prosecuted which was wrong.


Again, I am just relaying the reality of the position.

What the OR's office decide by way of a policy decision to examine in practice, or what they ask a debtor to disclose on an information form is not really the point. For one, there may well be a Trustee appointed who is not the OR and to whom the OR's policy decisions are irrelevant and for 2) The legislation states 5 years and does not differentiate between asset types. The reality is 5 years and this is perhaps a good example of why much of the information gained on the web needs to be taken in context and should not simply be regurgitated as fact.

I've not recommended anything. Merely stated (yup,you've guessed it) what the reality of this given scenario is (and corrected a couple of your fairly significant mis-statements).

Jonto

Mate, that would be a TAU as defined under section 339 of the IA. Gifted or transfered for signficantly less.

Truth be told it would be commercial for a trustee to realise once taking into account agents costs etc. Plus is you need it for work it would be exempt anyway.

TAU and pref payments are grounds for BROs the ORs as a rule won't pursue unless we are talking big amounts of money and a £3k impreza wouldn't fall into that catergory.

PM if you have any questions.

Jonto

there has been some recent case law set on s423, intent to defraud creditors, so the 5 year rule on TAU's may not be an issue anymore.

Unlikely a trustee would ever go under that though

Ps - KiwiGTI and funny symbol man........do you work for IPs?

sarnyboy

this all makes interesting reading...

thanks for all your advise guys, the book value on a 1993 wrx is like £1500 so i may as well list it as an asset, i dont think they ll bother takin it..?

Jonto

I would declare it and say you need it for work, which do don't you. wink wink.

sarnyboy

only problem is i have a company van... so they may ask how i drive two vehicles at the same time..? lol