Information and questions relating to Debt Relief Orders

Moderators: TalbotWoods, JaneClack

By andyharley0
#329933 HI ALL,I AM LOOKING TO DO A DRO SOON I NEARLY HAVE ALL MY PAPERWORK IN PLACE BUT THE ONE ISSUE I HAVE IS MY CAR IS WORTH APPROX 1800 SO I NEED TO SELL IT AND GET A CHEAPER ONE.THAT IS NOT A PROBLEM BUT AM I BREAKING THE LAW OR WILL THEY CHECK WITH DVLA OR ANYONE ELSE? THANKS
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By TalbotWoods
#329953 Providing that you use the surplus value, to either pay down creditors (pro-rata) or to pay normal bills, or cash at bank for the OR to cease, it will not be a problem. Obviously you would need to pay for Tax, change in insurance, etc out of the surplus, and maybe even pay for your DRO fee of £90.

And yes they do do a check of DVLA to see what vehicles you have or have had in the past 2 years, but if they can see you have sold a more expensive one, for a cheap re one, and can explain what you have done with the difference, it certainly shouldn't be a problem.

Just a tip, get the Parkers Car Guide (or do as most people do look at it in the shop) and get the valuation of your car from that, remember only use the average price and adjust for mileage, you may find your car is worth less than you think! This is the guide the examiners use <Gough, gough>
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By TalbotWoods
#330003 Yes and No.

It is not counted as an asset, but it IS counted as a debt.

All qualifying debts must be included in a Debt Relief Order, which includes anything on Hire Purchase (HP) or on any credit agreement.

If the applicant has a car, which is subject to an agreement, the debt has to be listed on the Debt Relief Order.

Because the agreement is secured to the vehicle and credit payments are not allowed within the Debt Relief Order budget, the likely outcome is that the vehicle will be repossessed.

As a result there could be a balance owing on the outstanding finance and this debt would need to have been included in the Debt Relief Order.

Be aware that this will add to the DRO debt pot, and may push the balance above £15000, thus effectively stopping the DRO.

It is feasible to ask the finance company whether they would agree to someone else having the HP agreement or credit agreement put into their name, but whoever that person is, must be the person to make the payments. Be aware that the creditor can refuse or can insist that the person taking over takes out a new agreement under different terms the the original.

If you have a car on HP or Credit, then you MUST seek advice and guidance from the DRO facilitating organisation

Tim