Welcome to the forum Ana.

You can keep a car that you reasonably need if you go bankrupt or enter a trust deed. In this case the valuation isn't relevant right now, because if it's on hire purchase you don't actually own the vehicle. It's still owned by the finance provider until you have paid it all off.

Many vehicle hire purchase agreements contain clauses about bankruptcy and personal insolvency (which includes trust deeds). They aren't always enforced, so long as people keep making the payments. Can you tell us which company is providing the hire purchase please?

Can you also tell us what type of business you operate? Do you have any employees or do you lease any premises? Sometimes bankruptcy can be a bit tricky when it comes to self-employment, but it all depends on your precise circumstances.

Please don't worry too much. There's always a way to sort things out for the better.

Hi, thanks for your answer.

The company I have the Hire Purchase with is Close Brothers.

I am a graphic designer, working from home and I also visit clients. I don't have any employees, it is just me, my car and my computer.

Thanks again

my HP contract says both about insolvency and bankruptcy 🙁
This is what is worrying me the most now. I sent today an email to Close Brothers asking about it, hope they will answer soon.

Hi Ana,

Most finance companies don’t enforce these clauses, but you’re doing the right thing to check.

I’m unsure about Close Brothers, but hopefully David, Kevin, or Paul will be able to share their knowledge with you when they next visit the forum.

How much you your debts add up to in total?

How much (if anything) do you think you could afford to pay towards your debts each month if you were in a debt solution?

With your business, do you work as a sole trader or are you running a limited company?

These are all important questions for working out which type of debt solution could work best for you.

Hi TDA,

my debts are around 14k.
My budget ends up without any surplus after I take the basic stuff out. If I reduce my spendings to less than I consider the minimum, then I can get something around £80, but I worry that 4 years with that reduction is not something sustainable. Because of that, I was looking at sequestration as an option, but I am still trying to understand the differences between that and trust deed.
I am sole trader.

Hi Ana,

To qualify for a Trust Deed you need to be able to make a minimum payment per month.

If you feel you can only afford £80 per month and this is the maximum then a Sequestration could be more suitable. On this plan you only pay what you can afford.

If after a review of your budget you can’t afford to make any payments to the debts then under a Sequestration you are not required to.

In my experience in a Trust Deed or Sequestration as long as you maintain the car payments you can keep the car. We do always advise clients due to the clause in their finance agreement there is that risk a lender could want to take the car back but this is very unlikely.

Try not to worry too much there is a solution to help you with the debts it’s just working out which one is the best for you.

It does sound like sequestration would be most suitable for you. The termination on bankruptcy clause is always in the HP contract, but it is rarely enforced. However termination it isn't unheard of by any means, so there is inevitably a risk to the car.

Hopefully the lender will come back with a positive answer for you. Is there maybe someone else who could take on the finance for you in their name if the worst does happen?

Morning

We are now seeing more and more HP vehicles being uplifted as part of an insolvency process. The main secured creditors are Volkswagen, Santander and Motonovo.

P