How is a car on HP affected by a DRO

A question about : How is a car on HP affected by a DRO

I have very old debts owned by DCA's and I'm sick of being chased for them and have been advised to do a DRO, I rent my house, have no assets, but I do have a car on HP, only had it since September last year. I don't work as I have 2 registered disabled sons and need the car for getting them around. What will happen to my car if I do a DRO ? Thanks in advance for any help

Best answers:

• I'll try to look up the intermediary guidance notes on that tomorrow if no-one else has by then.
• The HP agreement isn't reported on my credit report, if that would help. Thanks in advance
• What is the car now worth and how much has been paid off?
  Are you up to date with payments?
  Looks like if not in arrears then you could choose to not have it scheduled in the DRO, but depending what value is left in the vehicle you may not be allowed the monthly payments as an allowable expense of the car has more than Ј1,000 value in it?
• The car is worth about Ј9000, not much been paid off, but I thought if it meets the basic needs of my family, they might let me keep it.
• I'm not in arrears
• This is one example from the intermediary guidance notes.
• Hmmm. I missed the disabled part, so perhaps that may help with that?
  We have 2 or 3 posters here who are approved intermediaries.
  I'll see if any are about and can give a firmer answer?
• Hi
  Action 2/outcome 2 from Fermi's post may be possible.
  Would your sons' DLA payments (these do not count as your income) be enough to cover the HP payments? Or could another 3rd party (partner, grandparent?) cover them? Or a mixture of these?
• I believe my sons DLA payments are not allowed to be used as income and It is enough to cover the payment. Thanks for any help
• Should be fine.
  The only problems would be if this was not a HP agreement or if it was a HP agreement that was due to finish in the next 12 months.
  Either of those scenarios could mean you having an asset of a car worth over 1k.
  As things stand you have the use of a car you do not own.
• It is a HP agreement and it isn't due to finish for 2 years, the company I get the car from doesn't report the payments to the CRAs. Would the HP company find out I've entered a DRO ? I think there is a bankruptcy clause in their t & c's ! Thanks
• Hi,
  I agree with what has already been said.
  The intermediary would not need to inform the DRO unit as you say it does not appear on your credit report.
  I did a DRO last week which excluded a HP car worth Ј5k (no disabilities) it was on credit report so I did inform DRO pre order team. Partner was going to pay the repayments as not allowable expenses (Ј1k rule) - all went through with no issue.
  Someone else would have to take over the repayments in this case (I see the point of using the DLA against the car - as the outgoing is listed as care needs, ie, non specific - just never done it for this scenario!) - but I could get comfortable with the idea.....
  Two other things; As said, make SURE this is HP, some agreements look HP when they are not and a lot of HP agreements have an 'insolvency clause' where they could terminate the agreement. In practice I have never seen this happen if someone continues to make the payments.
  DD
• So I wouldn't need to tell the HP company about the DRO ? What if OR see the payment on my bank statements ? Sorry for all the questions but thanks for the replies
• Your son's DLA payments go into the same account? If so then it's what they pay for.
• 11 Our right to end the agreement
  11.1 We will be entitled to assume that you refuse to comply with the terms of this agreement and to end this agreement, after giving you a default notice, if:
  a) you break any of the provisions of clauses 2,3,4 or 6 of this agreement;
  b) you provided false information when entering into this agreement;
  c) the Vehicle is destroyed or treated as a total loss under any insurance claim;
  d) you entered into this agreement for the purposes of your business and you stop trading or, if you are a partnership, the partnership is ended or court action has commenced to end it;
  e) you have done anything which would allow any of your belongings, property, income or
  savings to be legally removed to pay off any of your debts; or
  f) any of the following happens:
  (i) a statutory demand (that is, a written demand for payment of a debt of at least Ј750, which,
  if not paid in full, may result in bankruptcy proceedings being brought against you) is not paid
  in 21 days, or any steps are taken by you or anyone else to declare you bankrupt;
  (ii) you take steps to enter into an arrangement or debt management plan with your creditors;
  (iii) a bailiff or other officer controls or seizes the Vehicle or any of your assets following a
  court order; or
  (iv) the landlord of premises where the Vehicle is situated threatens, or takes steps, to seize or in any other way control the Vehicle or any of your assets.
  11.2 If we end this agreement, subject to your rights as set out in the notice, "Repossession:
  Your Rights," we may take back the Vehicle from you and you must pay to us:
  a) all instalments and other sums which have become payable by you to us under this
  agreement, and
  b) the outstanding balance of the Total Amount Payable, less:
  (i) any Option to Purchase Fee and any rebate of charges to which you may be entitled and;
  (ii) any money we receive from selling the Vehicle after we have deducted the costs of recovery, insurance and storage.
  This is what is stated on the HP agreement t & c's