For a lot of people the car is the first question, well before the credit cards. It gets them to work, to the school run and to a hospital appointment.

What follows separates the figures, sets out what is published about valuation, and deals with a car on finance. How sequestration works covers the process itself.

As a starting point, yes. Section 78(1) vests the whole estate of the debtor in the trustee, as at the date of sequestration.

What vesting means in practice

Vesting transfers the right rather than the keys. The trustee’s job under section 50 is to recover, manage and realise the estate for the creditors, and what a trustee in sequestration does sets out the functions in full.

A car with little or no realisable value is rarely worth a trustee’s time. The question is always what it would raise against the cost and disruption of taking it.

Vesting is subject to section 88

Section 78(1) is expressly subject to section 88, which is where the exclusions from vesting live. That is the provision a vehicle argument runs through.

From section 2(3)(b) of the 2016 Act, which opens with the words for the purposes of subsection (2)(c) and (d). Those are the Minimal Asset Process asset tests.

What the disregard does

A vehicle you reasonably require and which is worth no more than £3,000 is left out of the asset calculation altogether, under section 2(3)(b).

So it decides whether you get into a Minimal Asset Process, not whether a trustee in a full administration may sell your car. Whether you keep your car in a MAP deals with that route.

The Accountant in Bankruptcy prints the same figure more widely

Its guidance on assets says at paragraph 4.12 that legislation only provides for debtors to retain ownership of a vehicle of up to £3,000 in value and where it is reasonably required.

Its debtor guide puts the same figure to the public as a vehicle you may be able to keep.

£1,000, on the statutory route. That is a lower number than the guidance prints, and the difference is worth understanding before you apply.

The route the statute takes

Section 88(1)(a) keeps out of the estate property kept outside a dwellinghouse that could not competently be attached, which leads to section 11(1)(b) of the Debt Arrangement and Attachment (Scotland) Act 2002: a vehicle reasonably required by the debtor and not exceeding £1,000 in value.

A car on a driveway or in the street is kept outside a dwellinghouse. Section 88(1)(b) is the limb that deals with property kept inside one, and it works by a different test.

That is the same route a protected trust deed uses, because a trust deed conveys the estate except what would be excluded on sequestration. The two solutions share the figure.

The two published figures do not sit together

We are not going to reconcile them for you, because nothing published does. Ask your trustee for the position on your own vehicle in writing.

Four figures, four different tests

Full administration sequestration has a minimum debt of £3,000 under section 2(8)(a). That figure is unrelated to the vehicle disregard, which happens to use the same number.

The provisions of the 2016 Act in that table have been in force since 30 November 2016 and none of their figures has been amended since. The £1,000 vehicle figure sits in the 2002 Act instead, and section 88(1)(a) is what reaches it.

By an independent source, in practice. There is no statutory valuation method, and that is a genuine gap rather than an oversight in the guidance.

The power exists and has never been used

Nothing sets out how an asset is to be valued for these limits. Section 2(4) allows valuation regulations to be made and none ever has been, so ask your money adviser how yours will be treated.

Market value, resale value and forced sale value are all absent from the Act and the regulations. How assets are valued against the MAP limits goes through what is and is not published.

What the Accountant in Bankruptcy asks for

Paragraph 4.9 of its notes on assets wants a valuation from an independent recognised source, naming Glass’s guide, Parkers or a car dealership, with an explanation where the figure looks low for the make, model and year.

Its evidence checklist says that where a vehicle is valued over £3,000 the Minimal Asset Process criteria will not be met.

Value is not the same as equity

A car worth £4,500 with finance outstanding on it is not a £4,500 asset in your hands. It is also not automatically yours to keep, because the finance agreement decides who owns what.

The gap between those two ideas is where most disputes start. Establish the value and the settlement figure separately, and put both in front of your adviser.

Get the valuation before the application, not after

A valuation obtained at the last minute is the commonest cause of delay in this part of the process. It is also the document that decides whether a Minimal Asset Process is open to you.

Where the figure looks low for the make, model and year, expect to be asked why. A short note about mileage, condition or a known fault usually settles it.

Needing it goes to whether it is reasonably required, which is half of the test. It does not raise the value figure.

How the argument is actually made

The notes on assets tell advisers to confirm why the vehicle is necessary, giving a work commute, mobility needs and a rural location as examples.

So put the reason in writing at the assessment stage with something to back it up. A bus timetable that does not reach your shift start is evidence.

The warning nobody else prints as plainly

National Debtline says a car worth more than £3,000 may be sold even if you need it for work, and that a cheaper replacement is normally allowed to be bought from the proceeds.

A replacement is a matter for the trustee rather than an entitlement you can insist on. Get the position confirmed before you commit to anything.

A second car is a harder case

Reasonably required is doing real work in that phrase. A vehicle nobody in the household needs is a different argument from the only car a working family has.

Tools of the trade are separate again

The Accountant in Bankruptcy says you can keep tools you need for your trade up to a value of £1,000, and National Debtline gives the same figure for tools and books. Neither attaches a section number to it.

It depends on the agreement, because what vests is your right or interest and that is not the same as owning the car.

Why the agreement decides it

On hire purchase or conditional sale the vehicle is not yours until the agreement says so. Section 145(5) separately preserves a secured creditor’s right to enforce a security, so a personal obligation can be discharged while rights over goods carry on.

Where you bought the car outright with an unsecured loan, the loan is an ordinary debt covered by the discharge and the car is an asset in the estate. Which debts are not written off covers that split.

What to check before you apply

The evidence checklist asks for the agreement itself where a vehicle is on a scheme or on finance, so have it to hand at the first appointment.

A debtor contribution order is set using the common financial tool, so it is calculated from what your budget shows you can afford rather than from what you owe.

Running costs are expenditure

Regulation 15(2) of the 2016 Regulations takes your whole surplus income above the lower of the published trigger figures and your actual expenditure. Every pound allowed for the car comes off the surplus.

There is no percentage in the calculation

The assessment produces the whole of the assessed surplus rather than a share of it, which is why the expenditure figures are worth arguing properly. How a debtor contribution order is calculated sets out the method step by step.

The order outlasts your discharge

It normally runs for 48 months, which is longer than the twelve months to discharge. The payments carry on after you are discharged.

Budget for the payment period rather than for the twelve months. How to apply for sequestration covers what happens in what order.