I have £27,000 outstanding on credit cards and £14,000 outstanding on a hire purchase agreement on my car, if I decided on an IVA would i lose my car or could i keep it out of the agreement and carry on paying for it as normal? Could the IVA be just for my credit card debts?
That is really a decision to be made firstly by your hire purchase company as to whether they are prepared to allow you to retain the vehicle if you are bankrupt, and secondly by the Official Receiver who will decide whether the payments are reasonable.
If the car is returned, and there is then a subsequent shortfall after it is sold, this debt will be included in your bankruptcy.
Hi Claredr49,
A secured HP agreement for a car is usually allowed whilst in an IVA as its viewed as an essential requirement , just beware of who the actual HP agreement is with in relation with your creditors.
For example, my car was is an secured HP agreement with Black Horse and one of my main creditors was Lloyds Tsb.
After my IVA was agreed I received a letter from Black Horse saying that by entering into an IVA that I broke the T&Cs of my HP agreement and I had two choices,
Either pay in full the remaining balance or they would repossess the car.
Fortunately for me I was bailed out by my parents and paid the car off but when I actually phoned them , they said it was just a standard letter and if I continued with the payments there would be no problems.
Rather than run the risk of further letters/threats in the future (don't trust LTSB/Black Horse at all) I decided just to pay it off .
The standard letters can still cause stress which I didn't need and it cost LTSB about 600 pounds in interest.
Others have had the same letters on here and they have carried on with the payments/car with no problems but I just didn't fancy LSTB changing their minds 6 months on.
That should be OK in an IVA, so long as you are able to justify the need for an expensive car - for instance if you are in a prestigious job, or travel a lot of business related mileage.
Hi Clarevr26,
No problems with anything on here, we are all in or have been in the same boat at one stage or the other.
I just add my personal experiences which may just be a one off but these one offs tend to pop up more than once[;)]
All I can add is that the advice that you get from the experts is invaluable in going forward as they are dealing with this day in day out and have helped me out so much over the past yr.
Hi, my car in on hire purchase and I was told by my IP I would be able to keep my car under the IVA. However one day I was at home and the company called to advise me that as I was entering into an IVA I had broken the terms of the agreement and they were coming to reposses the car the following day. I explained that I was committed to paying the car off with them and they said they would speak with the legal department on whether I could keep the car. 10 mins later I had a phone call to say yes I could keep the car but if I defaulted at all they would re-possess no questions asked. I would speak to the people who the HP agreement is with to be on the safe side xx
Sound advice from fedup and broke. In every HP agreement there will be a clause which purports to enable the HP company to terminate the agreement if you enter into an IVA. Most won't actually enforce it so long as you don't go into arrears but you need to be aware that there are some finance companies (usually small, grubby tinpot ones) who see it as an opportunity to make a few quid and will try to repossess with the IVA being your only default. This will hopefully not happen in 99% of cases as most are reputable.
Last edited by ianmillington on Tue Sep 23, 2008 4:14 pm, edited 1 time in total.
Ian Millington
Insolvency Director
PDHL Ltd (formerly Personal Debt Helpline Ltd) www.pdhl.co.uk
In 10 years of doing IVAs on a very frequent basis, I have never seen a car repossessed by the finance company providing payments have been maintained.
