My wife and I are 4 months into an IVA and our car broke down, we were quoted by the garage to get a reconditioned engine which would cost us £2000, and £550 to fix. We decided to scrap the car and borrow money from family to finance a new car (as we had no savings and we needed a car for the school and work run).
However I notified my IVA advisors and I was told I was in breach of contract and would need to sell the car and finance back my family members.
This I said wasn't a solution for us as the car is a necessity not a luxury.
I'm due to have a call to discuss the next steps, I'm worried I will need to sell the car and then be left in a situation where I have to save for a car to the value of £1000.
What is the worst/best case scenario in a situation like this?
how did you intend to pay back?
if its out off your allowances and its not been put down on your I@e sheet then you are ok.if you need your car to get to work then your iva company don't have too much choice in either giving you a payment break to cover it or shutting up.cant see this as a breach as you have not taken out any credit .
cc received 6th January 2014 now upwards and onwards
When you borrowed the money from your relatives what was the agreement on how and when you would pay it back ?
If your relatives are in a position to not seek reimbursement whilst your IVA is in place then this may be able to be seen as a "gift" and therefore shouldn't impact.
If your relatives have agreed a repayment amount whilst the IVA is in place, then this is the conversation you will need to have with your IP.
A car is essential for getting to and from work and when in an IVA a reliable car is absolute paramount...
I would ensure your conversation is with your IP rather than a caseworker and have it written down exactly what has happened and what you have put in place so far - just in case you get hit by the nerves and you need to refer to it.
I am sure you will find a way forward in this - stay positive !
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
Thanks for the advice everyone, very useful, can they force me to sell the car and payback the money to my relatives, or repossess the car in anyway?
The agreement I have with my family is that I can pay them wen I have the money. I appreciate that I don't want to take liberties but they are aware of my IVA situation so could be deemed as a gift.
If your relatives are prepared to write a letter saying that they gifted you the money to purchase a new family vehicle and for no other reason then your IP should in my opinion be ok - however I am not an expert and your IP is really the person that needs to give you this assurance.
Let us know how you get on, but don't dwell on it - deal with it now so you can move onwards !
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
You should have sought permission for the borrowings but it was a genuine mistake. Ask your IP for retrospective permission and explain the borrowings do not need to be repaid at any particular rate and the IVA will be unaffected.
This should be acceptable and if not a quick variation would almost certainly get creditor approval.
If you were not going to enter into any form of repayment plan with your family members until the IVA had completed, then to be honest it is none of your IP's business as to how the car was funded. Which are firm are you with, and is the advice you currently have from the IP directly or a member of their staff?
I am with Freeman Jones, I was speaking with a member of their staff who almost without exaggeration was telling me off like a school kid. The rep did explain if i spoke to them about burrowing money to fund a car that I would've been declined (to the value of £5000) as it would be deemed as an asset. So either way I feel like I've done something wrong, but it was a genuine oversight as the car is essential to mine and my wife's everyday life and we wanted a car that wasn't going to be sent to the garage every week like our last car.
It would be great if one of the representatives from Freeman Jones could come on here and explain the advice given. I assume that you need a car to get to and from work, without which you could not earn the salary which is funding your IVA payments?
Hi Roy welcome to the forum. It would be a waste of everyones time and a huge inconvenience if you were to be forced to give back the car and refund your family - they could, off their own back buy the car for you with their own money. Yes, as you now know approval should have been sought however that is done now and hopefully your IP and team are flexible and appraochable enough to get this resolved with minimal affect. Ultimately your IVA payments are to remain as they were so no financial impact on the creditors, I would imagine their only concern would be if your family were to try and make a claim moving forward which of course they wouldnt be.
I hope you get this resolved asap and I look forward to hearing an update and seeing a response from a member of the Freeman Jones team.
Regards, Tina Shortland, Debt Advisory Manager for Melanie Giles at Debt Advice TV.
If you’re looking for effective debt related information, articles and news, then go now to our on-line advice service at www.debtadvicetv.com
If you’re ready to ask us for specific advice or help, then get in touch at www.call-me.debtadvicetv.com so you can start to free yourself from the stress and anxiety of overwhelming debt.
The information you've already received here on the forum seems to have covered most points and given you some sound advice.
Just to reiterate, and as Melanie has said, although permission wasn't sought, it was a genuine mistake and we now need to see how this can best be resolved.
Please can you email me directly, with your reference number, to Steve.Hewitt@Freemanjones.com. I'll then be in a better position to look into things and speak with your IP for you.
I'm sure we can get this resolved and look forward to hearing from you soon.
Thank you
Steven Hewitt - a member of the team at Freeman Jones
There you go Royston, Steve will sort this out for you. Best wishes.
Regards, Tina Shortland, Debt Advisory Manager for Melanie Giles at Debt Advice TV.
If you’re looking for effective debt related information, articles and news, then go now to our on-line advice service at www.debtadvicetv.com
If you’re ready to ask us for specific advice or help, then get in touch at www.call-me.debtadvicetv.com so you can start to free yourself from the stress and anxiety of overwhelming debt.
