possible to take out HP under an IVA for car?

[edb]

My husband and I have been in an IVA for about 3.5 years and last year our payments were reduced from £352 to £100 per month due to bad luck in employment - this was to avoid bankruptcy, which I really did I not want to have to do. We have our car on HP and have another 15 months left to pay off, unfortunately we have car troubles and the cost to repair exceeds £2000 and we just can’t afford to pay a garage. Does anyone know if it possible to take out further HP under an IVA and sell or part ex our existing car
Any help would be greatly appreciated.

[MelanieGiles]

Hi edb

It may be possible to take out HP whilst you are in an IVA, but you will need your supervisor's permission. Shop around to see what is available, and then speak to the supervisor when you know how much the repayments will cost. If this is going to affect your ability to maintain payments into an IVA - and frankly I feel that an IVA where you are only paying £100 is an ineffective method of debt repayment - you may be better off considering bankruptcy.

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

[sarah1975uk]

when in an iva you are not supposed to take out credit during the term of the iva. If your selling your car then im sure the proceeds of that are classed as a windfall therefore payable into the iva. Although i understand your car may be a necessety to you. But the idea of getting into an iva is to get out of debt. I think its morally wrong to take out further borrowing whether necessary or not. Not sure what your iva income and expenditure includes, but would have thought you have already been allowed contingency and car maitnence allowence in your iva without taking out further finance to pay for this.

Thank you for eveyone's help & Support xx

[MelanieGiles]

Not a windfall Sarah - the car would have been an excluded asset.

And if these people need a car for transport to and from work, then their IVA will fail as a result of not being able to earn salaries.

During the lifespan of any IVA there will always be one or two hurdles to get over, you simply cannot predict for the unpredictable, and there is no way that these people would have a monthly car maintenance allowance sufficient to fund a £2,000 repair bill.

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

[Adam Davies]

Hi
It,s amazing that your IVA was reduced to £100 per month as this would barely cover ongoing IP fees or is it a typing error and your payments were reduced by £100 ?
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Oliver]

You could potentially take out another HP to fund a car payment but will need permission from your IP. This will really boil down to the impact this will have on the ability to pay a reasonable monthly payment into your IVA.

Best Regards
Oliver

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

[DevonLassie]

Hi

I know that this will probably make me really unpopular but I just had to say that I disagree slightly with Sarah1975uk's comment "I think its morally wrong to take out further borrowing whether necessary or not" does this mean that she would never take out a Mortgage, after all that's a form of borrowing! I completely agree that the last thing a person in an IVA should be doing is wanting to take out further credit, but there are some expenses in life which are nigh on impossible to save up for i.e. a new car and a house!

Like Melanie has said for most people a car is essential in order to get to work and make a living, and therefore they shouldn't feel immoral if they rely on a form of HP credit to purchase a new car. The whole purpose of HP is that it's secured against the car, if you don't meet the payments you lose that car...I think that's a pretty good incentive to keep working hard!

Devonlass

[Adam Davies]

Hi Devonlassie
I agree with you that there are some things that require purchasing using credit.
The danger of relying on an older car is that the upkeep can sometimes exceed the monthly cost of a newer car on HP.
I agree with Sarah that no other credit should be taken whilst in an IVA and infact you are forbidden from doing this unless you have express permission from your IP.
I also think that anybody that goes through an IVA will think twice about taking on huge amounts of credit again.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[iva_squirrel]

Good morning,

An IVA will appear on your credit report for a minimum of six years from the date of arrangement. During your IVA, reputable organisations will certainly ask for information about your situation and will probably refuse to give you further credit anyway. However It may be possible to take out HP whilst you are in an IVA, but you will need your IP's permission. As you said there are some things that require purchasing using credit.

Kind regards,


Julia Simavi

Shortlisted with special commendation for Debt Counsellor of the Year by Credit Today Awards 2007

View my profile:
http://www.supersonicsquirrel.net/julia ... rofile.asp

Visit my website:
http://www.supersonicsquirrel.net

Credit Today Awards 2007 http://www.credittoday.co.uk/awards/winners.htm

[sarah1975uk]

Obviously credit by way of a mortgage to purchase your home is necessary. I was saying other credit ie credit cards or loans etc are morrally wrong.

Thank you for eveyone's help & Support xx

[Skippy]

I think everyone is right here! I never want credit again, but I appreciate that Dave and I may one day buy a property together so I would be on the mortgage. I will also want a new car and if I could I would have HP for that. I never, ever want a loan or a credit card again!

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[Destiny]

Hi, on the question of old cars, things have started to go wrong on mine and the costs are mounting (new tyres, clutch etc). My employer has offered me the chance of a company car. Obviously I will have to pay more tax on this benefit (although if i went down this route I would get one with low co2 to keep this low). My question is that although my existing car isn't worth a great deal would I have to pay over the proceeds of any sale into my IVA? Would it be classed as a windfall? My only worry with this is that if for any reason I was to leave my current employer, I would obviously have to give the company car back and would then need some money to buy another one! Anyone know anything about this?[?]

[Adam Davies]

Hi
My gut feeling is that your car is your property and you can keep the proceeds.Your reduced net income,because of paying the car tax, should hopefully be offset by your savings on repairs,car insurance and car road tax.So as long as you continue paying your IVA as agreed all should be ok.
Have a chat with your IP,but be sure that it,s the IP that you speak to so that you get a difinitive answer.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Destiny]

Thanks Andy, I will give them a ring.

[edb]

Thank you all for your advice a few weeks back, it was nice to know you all took the time to reply and not just hear what I wanted too.
Anyway I thought you would probably all like an update, you never know when the info may come in handy.
I have spoken with my IVA practitioner regarding taking our further Car HP. They have advised me to contact my existing lender and ask if they would be prepared to lend again, which in my case they are.
I am now in the process of gathering figures together and putting a reasonable offer forward to my creditors, who may or may not agree to.
As far as I have been informed an IVA can be extended up to a further 12 months, which means prolonging the life of your IVA, when really all we want is for it to be over, but this may be an option for me to put to my creditors.
I am looking at other possibilities before I put forward this offer and personally I would not want to extend my IVA more than 6 months.
Unfortunately I am not in a great position as I need my car for work and without it would not be able to continue with my existing job. Wish things were more simple.
I will keep you posted on the outcome. Thanks again.
Edb