www.iva.co.uk

When we went BR on friday, the judge changed the HP on the car from the secured loan section of the form to the unsecured part. So therefore the loan on the car will be wiped. But now I'm wondering what will happen to the car. Does it become ours or will the HP people take it back. Also it was only the judges opinion that the loan should be taken from secured to unsecured, what if he was wrong? If it becomes our car we will have to sell it because its worth 8000, so will be an asset. What will happen as my partner needs his car for getting to work which is 50 mile a day round trip?

Car HPs are normally listed on the unsecured list as it is mortgages that are deemed to be secured. Many finance agreements are actually unsecured but if yours is a hire purchase agreement the OR will need to speak to the finance company.

You can continue making payments to a HP agreement provided the OR and the finance company are happy. However, if the vehicle was bought using an unsecured finance agreement you will likely have to downsize the vehicle and hand the difference to the OR. You will not be left without a vehicle.

Are you sure that the car is on HP and not just being financed via an unsecured loan?

can you sell a car thats on HP, pay it off and downsize yourself with the leftover proceeds just before going bankrupt or would this be deemed as being in favour toa credito over another?

You cannot sell a car on HP without the permission of the HP company. But it you were to get permission, this would not be deemed to be preferring, as the finance company hold security over the vehicle.

Thank you melanie.

Hi Melanie

The agreement says Hire Purchase on it. To tell you the truth I don't really know the difference between HP and a loan for a car.

Then it is hire purchase and you should be able to keep the car, so long as the HP company and your Trustee allows this.