Finance on Car which is broken ???

[Malcolm1972]

Hi

I currently have just over 1 year left to pay for the finance on my car and am in an IVA

Today it broke down and will cost a fair whack to be repaired... The value of the car doesnt really justify spending 300-400 pounds on it to get it fixed (if it is repairable at all!)..

Where do I stand ? Can i stop payments for the finance - wait for them to take the car away as part payment for the remainder of the loan and ............ do i still have to pay whats left ? can they take more money if I am in an IVA or will they be unable to claim anytyhing else ????

Thanks

Malcolm

[Reviva UK]

You may want to read the HP document very carefully as depending upon the tyoe of agreement you may find that there is a clause allowing you to simply hand back the car if you have paid over 50% of the agreement.

[Malcolm1972]

Hi.

The contrat does say that I can hand back the car BUT - it says that it needs to have at least 6 months tax, be in a good condition and it needs to be DRIVEN to the finance people - which I cant do....

[carlmcmullen]

HI Malcolm,

The problem i could see with handing the car back and it not being in working order, there is likely to be a shortfall to the agreement, which i think can be included into the IVA as they are a creditor.

However you have agreed to a minimum dividend to repay your creditors and if you do not meet this dividend then your IVA will fail, so the differnce that you are paying to your car will have to be paid into your IVA.

Your IP may allow you not to pay the difference into the IVA for a few months to allow you to save for a cheap replacement car.

I would suggest speaking with your IP to discuss and clarify your position.

[chris.g]

I think it would depend on what agreement you have, is it HP or fixed sum loan? In fixed sum, they have no claim on the car so you may not be in a position to hand it back.

[johnnybriggs]

Ultimately a creditor's security is only valid if you care about the asset. You say the conditions state you must drive the car back to the creditor. If you stop meeting the terms of the contract what will the creditor do? They will either pick the car up themselves or they won't. As long as the balance isn't enough to breach your IVA I wouldn't worry, speak to your IP. I suppose in theory the car company could petition for bankruptcy but as long as they can be included in the IVA it wouldn't make any sense. It all depends on how tight your IVA is.

[Soulgrowth]

Just wondering whether it might be possible to get a payment break on the IVA to pay for the repairs to the vehicle? Then the vehicle could be returned to the HP company if you don't need it.

Debbie xxx

(I'm allowed to put kisses in as i think I may be related to "Malcolm1972" ... are you REALLY that old? [:D])

[Adam Davies]

Hi
I agree with Debbie
Ask for a payment break and get the car fixed,if it will cost £3-400.You can then keep the car and once the HP payments finish I presume that you will have to pay that money into your IVA.
If you return the car what would you do for transport ? If you don't really need it then get the car fixed and return it under the agreement.
Regards