QLD Possibly Declaring Bankruptcy - Take Work Vehicle?

[pat]

I recently lost a trial and was ordered to pay $30,000. I am considering bankruptcy. I recently purchased a work vehicle for $11,500. The bank owns the vehicle (car loan) and I owe slightly more than the car is worth. If forced into bankruptcy, or even if I voluntarily go bankrupt, would they and can they take my vehicle? I have no other assets they could sell and I see no point in them taking my vehicle when there is no equity.

 

[pat]

My work ute is worth slightly less than I owe.the bank has security.it is my only vehicle. I purchased it recently for $11.500. My question is if I go bankrupt can anyone take my ute.

 

[pat]

I should explain.I intend to keep the ute and continue making payments.I do not wish to include it in my bankruptcy.

 

[John R]

Hi Pat,

1. Have you engaged a lawyer to understand whether you have any realistic grounds to appeal the decision?
2. As an asset of a bankrupt, a car/motor vehicle with less than ~$7,350 equity is not presently affected by bankruptcy (from a legal perspective, it is defined as "non-divisible property"). You can read more on the MoneyHelp website section "Going Bankrupt".
3. It is important to also note that your car loan/financing agreement may impose additional obligations on you if you were to declare bankruptcy whilst still repaying the car loan.

Hope this helps. Please keep us updated with your progress.

 

[pat]

thank you for your advice. I will post once I have decided what to do.

 

[pat]

Hi Pat,

1. Have you engaged a lawyer to understand whether you have any realistic grounds to appeal the decision?
2. As an asset of a bankrupt, a car/motor vehicle with less than ~$7,350 equity is not presently affected by bankruptcy (from a legal perspective, it is defined as "non-divisible property"). You can read more on the MoneyHelp website section "Going Bankrupt".
3. It is important to also note that your car loan/financing agreement may impose additional obligations on you if you were to declare bankruptcy whilst still repaying the car loan.

Hope this helps. Please keep us updated with your progress.

 

[pat]

Hi John.I was wondering what additional obligation might be imposed by my car finance lender.Also in regard to the debt owed from the judges ruling,I have no assets they can take and i am self employed.if i fail to maintain any debt repayment agreement what would be the likely outcome.

 

[John R]

Hi @pat
Sorry for my delay. I inadvertently missed your follow-up.

1. Car finance lenders may impose additional obligations on bankruptcy. For example, requiring increased payments or revising the car loan agreement to cover their perceived "increased risk". That said, this varies by car lender.
2. If you didn't appeal the costs order, it is likely that the opposing party will pursue you to "enforce" the costs order (by seeking payment from you). Failure/inability to pay may result in involuntary bankruptcy.
3. You should consider contacting a financial counselling service to discuss your options. The Australian Financial Security Authority (AFSA) has a list of free and confidential financial counselling services.

Hope this helps. Please keep us updated with your progress.

 

[pat]

Thank you for your help. If I have no assets other than basic furniture washing machine ect. I don't see any benefit to them in forcing me into bankruptcy. Is it possible they would not bother wasting any more money trying to pursue me for costs.

 

[John R]

Hi @pat
It is possible that they may not bother wasting any more money to pursue you if you've made it clear that you are unable to pay.
That said, depending on the costs they've spent to date, they may still pursue you to "enforce" the judgment and at least attempt to partially recoup some of their costs.