Pay for Car Repairs while Bankrupt
- 02 Nov 2024
An allowance for car repairs should be included in your bankruptcy living expenses budget. However this may not be sufficient to cover unexpected costs.
- How to pay for Car Repairs when Bankrupt
- How much can be included in your living expenses?
- What if you get an unexpected bill?
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How to Pay for Car Repairs if you are Bankrupt
You should have enough money to pay for things like car repairs once you are Bankrupt. In fact the solution should ensure you always have the cash available to cover these types of expenses.
This is because you are allowed to include a reasonable amount to cover the cost of maintaining your car in your bankruptcy living expenses budget.
It is very important that you save this allowance each month. That way the cash you need to repair your car will be available when the time comes.
In addition to your repairs allowance you might also be able to save additional amounts. For example anything that has been included for emergency expenditures.
How much can you include for Car Repairs in your Living Expenses budget?
When you go Bankrupt you will be asked to submit your living expenses budget as part of your application form. You have to include all the reasonable expenses you need to live on each month.
It is very important not to forget about expenses such as car repairs especially as you do not normally pay for these every month. Within the Transport and Travel section of the living expenses budget there is a specific field you can fill in for “MOT and Ongoing Vehicle Maintenance”.
The amount you can include will depend on your circumstances and in particular how many miles you drive and so how often you need to service your car. As a rule of thumb most cars cost between £300-£500 a year to maintain which equates to £25-£40/mth.
When calculating the amount you need for car maintenance remember costs such as new tyres as well as the annual service.
What if you get an unexpected Car Repairs bill during Bankruptcy?
The amount you save for car repairs each month is designed to cover you for an average car service. But what if it does not cover the actual cost or you get an unexpected repair bill?
In reality there is no easy answer to this. If you have an Income Payment Agreement (IPA) the Official Receiver might be willing to allow you to suspend these payments so you can pay the bill.
This may decide to help you in this way particularly if without your car you would be at risk of losing your job and therefore your income.
If you are not currently paying an IPA or the Official Receiver refuses to help your only other option may be to try and borrow the money you need. Ideally this should be from a family member or a friend.