NSW Debtor Wants to Repossess Car Still in Finance - Help?

[Jkellyp]

Hi,

I have recently been declared bankrupt and all of my debtors have been informed. There is one debtor, however, for a short term loan that I got a few months ago that was originally $2000, but with late fees etc, this has now gone up to over $3600.

When I got this pay day loan, one of the questions asked was whether I had a vehicle, to which I put my car details in. There was no question as to whether I owned this car, or if it was under car finance. They are now stating that this short term loan is secured against my car and they can repossess and sell it. I have only had the car a year, and it is still under finance, and the term of this finance is for another 4 years.

My question is - can they take my car even though I do not own it and sell it?

The lady I spoke to seemed quite pissed off when I told her I had filed for and received bankruptcy, and she stated she will be taking legal action to take my car.

I am really worried, as I need my car for work, and I confirmed with the AFSA that I could keep my car as the equity in it is very low.

Help!

 

[Sophea]

Hi Jkellyp,

Bankruptcy does not affect the rights of a secured creditor to deal with its security, so provided this pay day lender holds valid security over your car, then subject to the terms of that security agreement, they are entitled to sell your car to recover the amounts owing. However my question is, isn't your car already secured to your car financier? If so, they would have first dibs on your car since their security came first in time.

 

[Jkellyp]

Hi Sophea,

What is valid security?

The car is financed through a different company. I would not even say I have paid 10% of the car off yet.
I have not included my car in my bankruptcy and the AFSA have allowed me to keep it as there are certain limits about the equity I believe. I have kept up to date with my payments as I need my car for day to day needs.

The pay day loan is 3600 and the car still has over 11k owing on it, so my question really is, how would they even be able to sell it if there is a loan owing to another company on it?

Many thanks.

 

[Jkellyp]

Can anyone elaborate on this thread further please!

 

[Sophea]

so my question really is, how would they even be able to sell it if there is a loan owing to another company on it?

Exactly my point. I don't believe they can, and the financier isn't going to come after the security if you are paying all your bills. Your trustee may be able to provide more info on this as he will have specific knowledge of the loan you are talking about.