persuing an IVA but absolutely need 2 cars

[Robin]

Hi there. Sorry to trouble you. We have unsecured debts of £104,000 (good grief) and are persuing an IVA. By re-morgaging (interest only) we can put together a realistic IVA payment of around £800 a month. The problem is we both work 24 miles from home and live in the sticks where there is no public transport. We have 2 cars. One we own 2 ½ years old ( value £6000) one MPV on HP 3 1/2 years old (value also £6000) The MPV is on HP and is £324 p/m 28 payments made, 22 to go. I am trying to keep both cars as they are obviously necessary for our work but also as they are good quality cars bought from new and with regular maintenance should easily last the duration of the IVA (5 years) The problem is the advice I am receiving is that I may be able to tack on additional payments at the end of my IVA for the 2 1/2 year old car BUT that my creditors might want to get their hands on that £324 monthly payment and add it to the IVA. I would like to be able to do that too, it would make my proposal a lot more likely to be accepted by my creditors, but we absolutely need 2 cars. So I am hoping we can propose the 800p/m, then after 22 months add the 324 to the IVA.

If they insist we get rid of the MPV it means I will have to get a car from somewhere else. Where do I get the money for that? And any other car I get will be vastly inferior to the MPV, higher mileage, more maintenance costs, and perhaps an HP payment of £150p/m for 60 months. I am tempted to do that just to make my IVA proposal more tempting! (£1124) but no car means cant get to work!!

Robin

[MelanieGiles]

Hi Robin and a warm welcome to the forum. You are no trouble - this is exactly what the forum has been established to do.

There should be no reason why you cannot keep the two cars, as your needs are easily explained. Once the hire-purchase payments have concluded, your creditors will expect to see a proportionate rise in your monthly IVA contributions.

I am sure that your own IP has alrady given you this advice, but I feel sure that your proposals will be acceptable to creditors.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Oliver]

Hello

If you both need cars to get to and from work you will almost certainly be allowed to have two cars and a budget to run both of them. The only problem I can foresee is the value of the cars and the cost of the HP for the second car. As IVAs are always comparable to Bankruptcy it is important to realise that in Bankruptcy any car valued at over c£2000 may have to be sold and then downsized to a cheaper car with the excess money going to your creditors. In an IVA this is not always enforced as strictly however, the value of your focus at £6k could make the creditors demand that you sell this and downsize. The zafira is not worth anything currently as there is more money outstanding on it than the car's value. The creditors may demand that you return this car to the hp company, included any remaining hp debt into your IVA and then take out a cheaper hp agreement.

However, I do believe that both these points could be argued. Is your focus really worth £6k, taking into account that you need a "trade" sale value?!!! Do you have children, which makes having a zafira a reasonable option?!!! You could argue that the zafira is only going to cost £324 for the next 22 months whereas a new hp agreement would likely last for the 60 month duration meaning that it would have to be very cheap to make it a better prospect for your creditors.


Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[kandh]

Hi

Hubby has an IVA and we have 2 cars. We have 4 children so have an MPV. Although he works normal hours most of the time, his work can involve irregular unsocial hours as well as on call at short notice so public transport wasnt an option so he also needed a car. As he is also away quite a bit I needed a car to do the school run (3/4 hour walk otherwise) and shopping etc when he wasn't around. The cars were worth £3000 and £1000. Our IP was happy with our explanation and reasons for wanting to keep both cars.

HTH