car on finance

[matthews15]

Hi

My fatherin-law is going to go bankrupt and his car is on finance . What happens about the car as he has now He has stopped paying the finance. Will he return the car. Does he wait for the car to be taken off himself . He has no money to buy another car. So just need to know for the best what he should do.
Thanks

[Kelly O]

If the loan is secured on the car the loan company will eventually reposses and the shortfall will go into the bankruptcy.

Do you have the original agreement? Sometimes they can be a fixed sum loan agreement and these are not secured on the car and will go into the bankruptcy as a debt. If this is the case the car wilbecome an asset in the bankruptcy.

Has your father in law had some bankruptcy advice?

[matthews15]

Thanks
It with Audi they brough a car on finance with them for £20000 . So do they just wait for them to take this vehicle back or should they contact them and hand it back. They pay Audi £400 a month for the car.

[matthews15]

Just read the contract says hire purchase agreement . Does that help.

[Tina Shortland]

Hire purchase indicates it is secured against the car - check the small print to see what clauses there are in there about bankruptcy. Can your F-I-L afford to keep up the repayments in the budget he will have to live off? If he can, and the HP company agree, and the OR agrees that he can keep the car (lots of ifs) then it might be possible to keep the car. If he cannot afford to maintain the repayments on that then it will need to be returned and it is down to the HP company as to how they administer that. There may be a balance owing which would then become unsecured and will go into his bankruptcy. First thing is to find out from the HP company what their policy is by looking at the paperwork.

Let us know how you are getting on.

[matthews15]

Thank you Tina for your help. Ther is no way he can keep the car he couldn't afford the payments. But i will have a look at the papework again.