my daughter has recently got divorced, ,before the split her husband bought her a car on finance, after the split she took over the payments,but the loan was still in his name,the car is registered with her as keeper.
he has now declared himself bankrupt,she took over the loan and has been making payments for the last 12 months,how does she stand, will the car be classed as an asset,or will she now be classed as the legal owner.

Is the finance agreement still in his name ?

She may be the registered keeper but this is a asset in his name (financially) therefore if he is in debt then maybe this can throw a spanner in the works!

Is it worth contacting the finance company in question ?

Would go with Deejay here.

Being the legal Keeper is not the same as being the owner.

I'd speak with the finance house and someone like the CAB, but I am pretty sure that the Trustees in Bankruptcy would view the car as his asset.

Joe

you could try contacting the finance company and ask them if you can take the loan over. Show them some proof that you have been making the payments.

Perhaps they would prefer to transfer the finanice into your daughters name and continue receiving the payments than have to take back a car which they can't do anything with.

could they do that, would it be legal, we did think about letting her sell the car to me.and me giving it back as a gift,does anyone know if that would be possible.
the finance his still in his name ,but yes she can prove she has made the payments regular and on time.

To be honest mate whilst his name is splashed all over the car finance details it technically is his property therefore she would have no right to sell it to you (Even being the registered keeper of car)

You definately need to speak with the finance company or even a solicitor..

Originally posted by Deejay
To be honest mate whilst his name is splashed all over the car finance details it technically is his property therefore she would have no right to sell it to you (Even being the registered keeper of car)

You definately need to speak with the finance company or even a solicitor.. I tend to aree with Deeja as well but if you can't afford a soliciter then seek advice from Citizens advice centers.:)

roughy101

There is a distinction between a Hire Purchase (HP) agreement, where the car remains the property of the loan company until the loan is fully paid off, and an unsecured personal loan, where title to the car passes to the purchaser on payment of the price to the seller- irrespective of who provided the money. It is not made clear which of these is involved.

If you take out an unsecured personal loan to buy a car and default on the payments, the lender (bank/loan company etc) cannot simply repossess the car. They will need to pursue the debt through the courts. If they get a court order against you, they can send in bailiffs to seize assets to the value of the debt, which may include the car, but not necessarily. They can also pursue other options, such as an Attachment of Earnings Order, whereby your employer is required to deduct debt repayments directly from your wages and pay these to the creditor.

In the case of your daughter (D), you indicate in your post that she is now divorced from her husband (H). I think this is the crucial point. If the divorce has been finalised, then agreement on who owns what assets should have been made as part of the divorce settlement. If it was agreed that D had ownership of the car, then there is no problem. If it was agreed that H still had ownership, then it is strange that D continued to make the repayments.

Another crucial point is that H has already filed for bankruptcy. Once you do that, you have to make a full declaration of all your assets, and moreover you lose control over them - you are no longer free to sell them or give them away to somebody else.

http://www.insolvencyhelpline.co.uk...ruptcy-faqs.htm

If the car is under an HP Agreement, then it is still the property of the HP company. They may, in the circumstances, be prepared to negotiate a transfer of the agreement from H to D.

If the car was bought with an unsecured loan, then it all depends on who it was allocated to under the divorce settlement. If it was allocated to H, then D is on a sticky wicket; H is no longer free to transfer ownership, and the car can be sold by the receiver to repay debts.

If in fact D and H are separated and not yet divorced, then there hasn't been an agreement on division of assets. It could be very messy, deciding in court whether D or H is the legal owner of the car (if paid for with an unsecured loan).

Originally posted by JoePritchard
Being the legal Keeper is not the same as being the owner.
asset.

Yep, it used to say on the top of the log book "The registered keeper is not necessarily the legal owner".