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Bankruptcy Case Studies In Respect of "Your
Car"
The Law
If you have not yet read the law set
out in the Insolvency Act, especially that part which relates
to "employment" and wish to do so click
here now.
Background
Bill retired two years ago and he thought
he was secure for the rest of his life. He rented his home,
owned a new Jaguar car outright and had a pension of £13,000
per year.
Bill's wife Ann fell seriously ill just
weeks after Bill retired. Ann had two major operations and
nursing home care before she died a month ago. To pay the
costs Bill used up all of his savings of £12,000 and
took out a loan for £20,000. Subsequently Bill found
he could not keep up the repayments on the loan and petitioned
for his own bankruptcy.
Question
Will Bill be able to keep the Jaguar
car in the bankruptcy or will the Official Receiver (O.R.)
give some of the sale proceeds of the Jaguar back to Bill
so that he can buy a smaller car?
Answer
Unfortunately bankruptcy law is not concerned
with empathy only a consideration of the facts.
As Bill was not employed he did not need
his car "for the purposes of his employment"
In consequence the Jaguar was sold by
the O.R. and the entire proceeds were paid into the bankruptcy
estate. No money was returned to Bill to enable him to buy
a cheaper replacement car.
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