Hi Almostover

The legislation is that a car valued lower than £3,000 is "exempt" from attachment. However, if the value exceeds £3,000, it's the total value that is taken into account. Usually, you are allowed to keep the car for work or another reasonable purpose, as you have been.

I'm confused about the whole "equity" thing you mention. Surely, if the car is on HP or some such finance, it's not your car? If that's what was agreed between you and your Trustee then that's fair enough though.

You should have received a copy of the Trust Deed proposal that was sent to creditors at the start of your Trust Deed. This should make clear exactly what is going to happen with the car. If not, contact your Trustee and ask for a copy.

If you're paying the value of the car in instalments, you would probably just pay the same amount as you had been in contributions, because strictly speaking you shouldn't be able to afford any more than that. However, you could agree a different amount with your Trustee.

Welcome to the forum almostover.

I'm also confused about your breakdown of equity.

If there's £3,000 of outstanding secured finance, surely the car isn't yours?

Hi Captain Sensible and TDA,

Yes correct the car is on Hire Purchase, currently the car is valued at approx £7000 and the outstanding finance is currently approx £3000, my TD is basically saying the difference between these too values is effectively my asset and I need to pay the equivalent to them now my TD is finished. This was agreed at the start of my TD so I was always expecting to pay an amount however my question was more, surely if the legislation states anyone is allowed a car upto the value of £3000 before it is considered an asset then this has to be subtracted from the amount I pay my Trustee? If I effectively own £4000 of the £7000 car then I should only need to pay them £1000 not the full amount they are asking (£4000)? This was discussed at the start of the TD, I queried it over the phone and was told the £3000 allowed would be taken into account but there is now no note of this it seems and they want the full amount which will be taken by extending my TD until it has all been paid.

I will talk to them about it but just thought id put the question and concerns to the forum first.

Thanks

Hi Almostover

The legislation states that if the vehicle is worth less than £3,000 it is exempt from attachment, meaning that it can't be taken from you and sold. In my mind, your Trustee wouldn't be able to do this anyway, as the car is subject to finance.

However, if you and your Trustee came to an agreement at the start of the Trust Deed whereby you only pay over the value of the car less the finance and less £3,000, and that was accepted by the creditors, that's fair enough. Only you and your Trustee will know that though, so it's best to discuss it with them.

We've heard different interpretations of this from different firms over the years. Some have looked at a value in excess of £3,000 and others the full value of a car worth more than £3,000.

This seems irrelevant here though, because you don't own the car.

What appears to be relevant is that you agreed to pay this sum as part of your trust deed proposal. If that's what you agreed, and that's what your creditors accepted, then I guess that's what you'll have to do.

I don't really understand why this would have been suggested or agreed though.

Cars are an area where different insolvency practitioners will adopt different policies. It is not set out strictly as to how they must be dealt with, except that a car with a value of less than £3000 which is reasonably required should be exempt.

As others have said, check what was agreed at the start. If you don't feel it was represented to you correctly then you should let your Trustee know - maybe they will reconsider?

I agree with Kevin.

Check the initial creditor circular that outlined your proposal to creditors as this would have determined their decision as to whether to agree to your trust deed achieving protected status.