Is Personal Insolvency Failing Fleet Management?
Paul Daine -International Commercial Debt Recovery Specialist
Specialising in national and international commercial debt recovery with over 35 years of experience in the industry.
For many people, a car is essentially a tool of the trade. Without it, they would be lost.
For these same people, should they become insolvent, their car can feel like a lifeline, and they will do what they can to hold on to it.
But what are the implications if the car is a company car?
Is Your Car a Necessity?
Public transport is not always reliable, or flexible enough, as a first choice of transport.
The problems with Britain’s rail network are well known and continue to make the headlines.
At the same time, the BBC reported a significant shrinking of the country’s bus network, to its lowest level for 28 years, losing some 134 miles over the past 10 years.
Therefore, if you become insolvent and you need to travel to find work, you may find a car is your only option.
Missing in Action
Recovering company cars from insolvent individuals can be like tracing an absconding debtor. It is not something fleet managers are necessarily used to dealing with, or something they have the resources to focus on.
People are more likely to hang onto a company vehicle as long as possible and this can be an issue for any business looking to secure its assets
It can also be an issue where a business itself becomes insolvent and needs to account for its assets, but finds that company cars are still in the hands of individuals.
Insolvency has unforeseen and far-reaching consequences. It can impact both on businesses and individuals.
Vehicle Rights
When it comes to insolvency, company cars can be contentious.
In the Mikki v Duncan case, the Appeals Court dismissed an appeal from someone who was bankrupt who wanted to be able to regain his hire purchase vehicle, on the basis that it was an essential tool of the trade.
This decision seems to have contradicted previous recommendations regarding classifying vehicles as tools of trade.
Fleet managers need to be aware of the issues, and of the difficulties surrounding company cars and insolvency.
If you require specialised commercial debt recovery to provide you with the necessary insights and apply practical solutions for getting vehicles back, please contact me.