Hire Purchase

[alex]

Hello,

We have 2 children under 7, and a total debt of £42,000 spread over 6 credit cards, 1 loan and 2 overdrafts. We also have a car on H.P. which is essential to travel to work / pick up kids from school. Do we have to give up our car if we go ahead with an IVA?

Thank you

Alex

[iva_squirrel]

Hello,

If you buy goods such as a car under hire purchase (HP),you do not own it until you have made the final payment. Until then, it belongs to the creditor (the finance company).

Usually it is possible to keep possession of a car worth less than £10000, especially if it is required for work or family reasons. If your car is financed on a Hire Purchase, the outstanding balance cannot be included in the IVA because the finance company will simply repossess the car. More often than not, an IVA can take place even while you are making HP payments.

However, once the HP is completed, the monthly payments must be contributed towards the IVA instead.

Regards,


For more information about IVAs, please visit my website:
www.supersonicsquirrel.net

[Storm]

You should confirm the terms of your HP agreement do not give the company an option to terminate if you enter into an arrangement with your creditors.

Lenders in the HP sector will look to protect there position which may include repo of the vehicle.

There view on this and the ability for them to repo will be based on a number of things including how far into the agreement you are.

Many HP lenders are concerned about IVA's particularly as they would be relatively unsuccessful litigating you for any shortfall should you fail to keep up payments once in an IVA.

[Oliver]

Hi Alex

If you were to go ahead with an IVA, you would almost certainly be able to maintain your car HP outside of the IVA agreement - given that you need the car and the monthly HP repayments are not unreasonable. You would simply build in the HP payments to your monthly expenditure budget. I have been involved with 100s undertaking IVAs of people who have done just that. It is quite common and an accepted practice by the cerditors.

As has already been mentioned, the proviso is that once your car HP payments have finished and you own the car, you will have to add what you were paying into your HP to your IVA. ie Your IVA payment will increase.

You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
James Falla
www.thomascharles.com

[accgroup]

Hello

Both of the comments above are correct, you should be able to keep the car on HP, as long as you are not behind with your HP payments and there is no clause in the HP agreement which states that if you enter into bankruptcy/an agreement with your creditors the HP agreement is terminated (this is usually found in very the small print!).

We frequently deal with cases where people entering into an IVA have a car on HP and continue to make the monthly repayments throughout the IVA. Once the HP is completed it is usual for the monthly IVA contributions to increase in line with the reduced expenditure.

An insolvency practitioner will be able to advise you further, based on your specific circumstances.

Hope this helps


AccumaGroup
http://www.accumagroup.com - One of the UKs leading debt and insolvency advice firms with over 200 employees.

[iva experts]

Yes it is quite normal for people whom enter into an IVA to continue paying their car HP. One word of caution though, I have noticed that some car dealers are providing people with credit agreements for the financing of a car which are not HP agreements and as such must form as another creditor. Check your paperwork to make sure you have a HP arrangement and not a credit arrangement.

Hope this information is of use

Regards. IVA Experts

[Storm]

The agreements you refer to are in essence Personal Loans rather than traditional HP or in some instances are top up loans where the main agreement is HP but a top up loan is also in place so that the dealer can finance PPP and GAP insurance policies.

Lenders such as Capital Bank, Blackhorse and Barclaycard Motor Finance use Personal Loans quite a lot primarily to prevent Voluntary Termination risks associated with HP.

In the past 18 months there has been considerable use of top up facilities by dealers including Carcraft and Vardys.

So you could actually have a HP and Personal Loan running for the same vehicle.............

[Oliver]

To add to Storm's comment, a lot of the traditional HP providers such as Black Horse are now actually contacting their client base and suggesting that they convert their entire HP agreement to a personal loan.

My understanding is that this is because the bottom has fallen out of the second hand car market. As such, if clients use their right to terminate the agreement after the designatied period and simply hand the vehicle back, the likes of Black Horse are left with a vast number of second hand cars which worth little and they can not get rid of.

On the face of it, this seems convienient if you are considering an IVA as the personal loan can then be included. However, creditors such a Black Horse very often reject proposals for IVAs. If the Black Horse debt had remained as an HP, this may have been ligitimately excluded from the IVA thus leaving the remaining creditors to accept it

You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
James Falla
www.thomascharles.com

[Dominic]

i am bought a PC via Dell Finance and have about £539 left to pay out of £2,2246 to go if the IVA kicks in can they take the PC back?

[Oliver]

You need to look into the original terms and conditions of this agreement. If this Computer is actually on HP you will need to keep up with the monthly installments to maintain the computer. These installments will be outside of your IVA and you will be allocated a budget for this.
However, the chances of the computer being on HP are slim indeed and I would bet that this is just a bog standard unsecured finance arrangement. In this instance the debt will be encompassed within your IVA. Dell will NOT be able to recover this computer under this circumstance as the computer will be deemed as reasonable for you to keep due to it's relatively low value, i.e even if you bought it for £1500 it's likely to be worth much less now at trade value.


You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
James Falla
www.thomascharles.com

[Dominic]

thank you again, it is an agreement with Dell Finance.

There is only about £500 or so to go, and the original purchase price ofg the PC was £1500 odd.

[Oliver]

It sounds like a run of the mill finance agreement to me. In that case the £500 owed to Dell will go into your creditors list.

No one will seek to take the computer from you and you will not be required to sell it as it is not of high enough value.



You can access Video Clips giving additional information about IVAs at:
http://www.thomascharles.com/interview_ ... an_iva.asp

If you would like more information about IVAs, other debt solutions, or just want to arrange an informal chat, please visit us at www.thomascharles.com.

Best Regards
James Falla
www.thomascharles.com

[Dominic]

Thank you once again, jsut found out that in bankruptcy assets do not include household contents. Does this mean if someone goes bankrupt they get to keep things like videos, tvs and PCs?

I am not planning on going bankrupt by the way.

[Storm]

Dell Finance is normally provided in the UK by CIT / Newcourt on a Personal Loan (PL) not HP.

[accgroup]

Hi Dominic

Yes, in bankruptcy you are allowed to keep household items PROVIDED that they are not excessive in value. For example, if you have a dining room table which is a valuable antique, in bankruptcy you would be required to sell the antique but funds would be returned for you to buy a reasonable replacement. This is unusual as most people do not have expensive antiques or items such as this in their household so in general most bankrupts get to keeps household furniture and electrical goods.

Hope this helps



AccumaGroup
http://www.accumagroup.com - One of the UKs leading debt and insolvency advice firms with over 200 employees.