www.iva.co.uk

my father is disabled and on benefits. recently his leased car was written off and the insurance company will not foot the bill. he is being asked to pay £8600 to the leasing company. he has no savings, and is supported wholly and entirely by state benefits. however, he does own his own home, without a mortgage. can the leasing company ask for his home??

The finance company could ask for him to dispose of his home to settle the debt. Alternatively once the debt is proven and judgement entered they could persue a charging order over his home.

Why won't they foot the bill ? Anyway, your Dad has a debt of £8,600 to the leasing company. It sounds like he is "asset rich,cash poor" (when I say asset rich I mean he owns his house outright). They could indeed make a claim on his house via a CCJ then a charging order or by making him bankrupt but in reality they will probably make his life hell before doing either. But these are options for them that you should be aware of - particularly the CCJ/Charging order. Are they asking for a lump sum all at once ? Sadly being only on state benefits/disabled will not stop them wanting their money and they'll soon know if he owns his own home if they don't already.

Hi ks and welcome to the forum

Why was he not covered by his insurance policy? Are you in a position to help him out with regard to this debt - possibly by taking out a small mortgage over the property and trying to effect a settlement?

I am afraid it does look as if he is contractually liable for the debt - your Dad could also offer to make nominal payments of say £1 per week if this does eventaully go to Court.

In your Dad's case, a charging order may not necessarily be so bad - and is probably just the same as taking out borrowings against the property. I am assuming he has no other debts?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk