Hi Darren
This could be a tricky situation. Did you and your friend draw up any kind of agreement? If it was a straight forward loan, with no reference to the car, then I would think that your car is not at risk. I would also think that from a legal point of view that the debt is his and would have to be included in the trust deed, that being the case maybe an arrangement could be made for you to pay the remaining balance to the trustee, it would go in to "the pot" to be equally distributed to all the creditors at the end of the term, make no difference to your friend other than a greater divided for his creditors, but your conscience would be clear having fulfilled your agreement. On the other hand, your friend may not tell the trustee that the loan is for you, it could be included in the trust deed and you don't have to pay.
Please note Darren, my comments are my own logical thinking, not expert advice. I'm sure that will come tomorrow.

Hi Saabrina, thanks for the advice. The only problem is that the car loan although personal and unsecured was arranged by the car dealership and he has alerted the trustee to my knowledge about the situation.

I don't know if the loan company are aware of what the loan was for originally, but as a personal car loan and personal loan differ I assume they had details ie reg make model from the dealership.

There is no written agreement between us, he took out the loan at the dealership signed the paperwork and I registered the v5 in my name.

I am a little unsure as I've read that it may look like he is undervaluing assets as it is his loan that originally paid for the car and this could be challenged up to five years previous of the trust dead. However as far as I am aware I am the legal owner and reg keeper of the vehicle as there are no outstanding finance or loans secured on the car in question I may be wrong. He has never been on the v5 only me and I've paid a year of the payments.

Any more advice would be great and thanks again.

I think that the 'Registered keeper' can be one person, and the 'legal owner' another.

If your friend took out the loan in his name, and the loan is clearly linked to the purchase of the car - he's probably the legal owner.

And you are the registered keeper.

Which would make the car one of his assets.

Hopefully, I'm wrong.

I think candlewick is probably right (as usual). You are the registered keeper but given that your friend purchased the car using finance in his name I'd say that he is the owner.
Therefore the car is an asset belonging to him and the trustee would need to asses its value and possibly sell for the benefit of your friend's creditors.
Having said that, your friend's trustee may well be willing to accept payments into your friend's trust deed by a third party (ie you) to "buy out" his interest. In practice this might mean that you are just making a payment to the trustee each month for the car instead of to your friend.

That's interesting Kevin.

It sounds like the sort of situation where a trustee will need to use their judgement rather than there being a clear answer?

Darren1901 - Do you know 100% for sure that it was an unsecured loan used to obtain the car? Definitely not hire purchase? Do you make your payment to your friend or to the lender directly?

Hi, I make my payment directly to my friend. It was a 100% unsecured. Thanks.

Hi Darren1901.

It does look a bit like you're paying your friend to use his vehicle in that case.

It may be that you can agree with the trustee to make payment to them (into the trust deed) for continued use of the car. Certainly worth trying.

Darren

I am entering a similar arrangement with my sister (see my post "New Van").

The V5 document DOES NOT PROVE OWNERSHIP OF THE VEHICLE !
This is plastered all over the DVLA guidance notes and also in capital letters on the V5 document also. The V5 only records the registered keeper of the vehicle, and as such any taxation documents etc are addressed to that person.

I had a look to see what in effect does prove ownership of a vehicle and it appears that any documenst, invoices etc from a dealer or seller of the vehicle will usually detail the purchase of the car and therefore could be produced to prove ownership.

Your friend is taking the monthly payment from you and paying for the loan or finance with it so as I understand it he is in a no gain situation (financially). With regards to how it effects a TD the esperts have commented on that but just wanted to let you know re ownership of the car....best to have something in writing to clarify the situation and the arrangement and also what happens at the end of the 48 months i.e. he gives you a document traneferring ownership to you.

My sis and I have gone through all the potential scenarios including either one of us dying in the next 5 years!! We have of course agreed not to fall out lol !!

Good luck with your situation best wishes.

Buz

could i transfer ownership to darren before trustdeed and orginise to pay car loan company direct so he would be in total control of car

Hi richlaw666.

I'm not totally sure that I follow your question. Could you clarify it?

In general terms it isn't possible to give away assets prior to personal insolvency in order to prevent them from being realised for the benefit of creditors. I'm not sure whether this is what you mean though?

Was told by trustee he could still use it if we carried on putting the payment into the trust deed but say in 6 months he did not want car what would happen

Then I guess the trustee would sell the car instead, with the proceeds going into the trust deed for the benefit of creditors.

And i would not have to make that extra payment towards the deed

That's right Richard