Car Finance while in a IVA

[starman2011]

Hi all,

I was hoping someone could help or advise with my current crisis!

I am coming up to my fist year of our IVA (joint IVA between my wife and i), all is going well and the last year has been a major relief.

My Car has died. It is a very old car and is really pointless gettin it repaired as the costs being quoted are almost up to £1000 plus it is over 10 years and the cam belt is well over due.

I am a mobile Computer Engineer plus i do the school runs - My Car is my life and one of the most important things in my job to get from A - B.

To cut a lng story short, one of my customers is a car salesman, i saw a car for 3.5k which he is selling at his sales garage. I discussed my financial position and he advised a finance company to use - To cut another story short, the finance company have approved the finance and require a letter from my IVA company
approving of the finance.

The last thing i want to do is use a finance company however i have no cash flow, no rich parents and Need a car.

The IVA Company have advised that they will need to hold a meeting with the creditors etc etc to see if this can go ahead. They advised that this could take 3 weeks plus ? and with xmas coming up!

I explained to them that i am in s**t street without a car - I am not buying a new Yacht! but they will not provide with me with a letter until the meet with creditors!!

So what does one do in the mean time!
? Help
thanks
Steve

[luluj]

go back to your IP and ask them to review this - they clearly need to respect that without a car you will not have a job which in turns equals no income which in turn will cause IVA to fail .....

do you need to spend £3500 on a car - are there any other cheaper options ? and what are the repayments per month ? does this cause you difficulty in paying your IVA amount each month - how are you planning to fund the monthly payment ?

Sorry for so many questions but your IP will need to have as many facts and reasons for why this particular car.....

[lem]

If I'm honest, I think you might be asking too much for £3,500 for a car when you are so early in your IVA, I understand your sentiment that you are not wanting a yacht however, £3.5k when you have had to go down the road of an IVA as you couldn't meet your committments seems to be a bit much, if i was a creditor I would be mighty miffed that I would be expected to write off a portion of your debt and you were now wanting to take on more to buy a car.

Now on the flip side of this, you need a car that is true but instead, why not see if you can take a payment break and just buy a cheap runaround? or look at leasing instead? you can pick up bargains for around £1k easily with MOT (I did myself 18 months ago)

[Foggy]

For that sort of money your IP is obliged to go to the creditors -- they are not just trying to be awkward!

For a run around, they might be more agreeable to a payment break, to be tacked on the end of the IVA, and might not have to go to the creditors to agree this.

[starman2011]

Thanks for the advice guys,

I personally think a £3,500 car for the job i do - (driving all day, 25 mile radius to where i live, plus something reliable) is totally valid?
The actual loan would be around £2,800 as i will trade in the old car and family will donate a few hundred to create a decent deposit.

The car i have (which has died) was a cheap runaround purchased two years ago - in the two years i have spent the same amount for repairs. Sometimes cheap runarounds can turn into a disaster.. however as you mentioned, the creditors may take issue with this.!

The repayments will be around £90 per month ( the finance company will not give me accurate figures until they have authorisation from the IVA company).

With regards to being able to pay for this extra expenditure -
- Well what other choice do i have.
- I have worked out our finances and can afford this.
- My wife has recently had a promotion and pay rise (which we have recently declared to the IVA company) - could / would they allow this extra income pay for this ??

[lem]

It's worth a shot and who knows what they will say? however, cars are hit and miss, as I said I had a £1k old car that was a gem and cost me nothing over the course of 18 months apart from MOT (which it sailed through) and my trip to work was 60 miles a day, as opposed to a brand new clio a few years ago that caused me no end of problems and cost me a fortune, it doesn't always follow that the more you pay the better and more reliable a car will be.

But you have to have a plan B, what are you going to do if they say no?, you need to have that option in the back of your mind now

[Adam Davies]

Hi
In think it is more cost effective in the long run and agree with you that the car seems a better option than a runaround.
Your IP could allow your wifes payrise to be used for the car without referring to your creditors.

I don't see a problem with the payment being allowed, the problem will be getting agreement from your creditors/IP

Regards

[Broke of London]

It may be quicker for a parent to buy the car and you lease it from them (for the exact amount of the monthly loan repayment funnily enough ). If you can show that using public transport costs more than running and leasing a car then it should be fine. This was agreed when my car died and we didn't go to creditors as my IP gave approval.

[starman2011]

Well it has been an interesting couple of day's.. the last 10 months since the start of the IVA has been fantastic, a weight of our shoulders, peace of mind and just letting the IVA do it's job.. and now when things like this happen it does hit home that we are tied by our bo**ocks and very restricted what we do.

I am not knocking the IVA, it has worked for us and we now sleep at night, and basically grateful that the creditors and IVA company have helped us!

I am sure common sense would kick in if and when they do have a creditors meeting as a reliable Car is what i need to survive and make money (this is not london so i can not catch tubes and busses) i am in the sticks and visit on average 5 customers per day plus school runs at least 4 day's per week),

I suppose my only issue is that i need to take urgent action and cannot wait until a meeting which i expect to take place in a minimum of 3 weeks time.

I don't want to get into a "cheap runaround 1k car VS a 3.5k car" debate, but if i had to buy a 1k car (i have seen a few today for example) - tax runs out in January, Mot due in March - So that is £1000 + Tax + MOT and if i am very very lucky no additional parts will be required... but for a 1k car i am fairly sure there will be a few parts need replacing

Against a car for 3.5k which is taxed until next August and Will have a years worth of MOT and six months warranty and generally more reliable..

Anyway thanks for listening.. i will keep you updated!

p.s.
In a positive way of thinking - I am glad i know longer have my credit cards with 5k credit limits and easy one click loans via internet banking! God know what Car i would have bought! lol

[Broke of London]

I wasn't suggesting you should go without a car but at the end of the day your creditors only care about getting their money back so you have to think how they think. I actually live half my life in the sticks and by the time taxis had been taken into account to fill the gaps between tubes, trains and buses my creditors were under no illusion that they would profit by allowing me to lease a car. They do have us by the nads so we need to make sure they are furnished with all the information to make the best decision. Do the sums for a month using public transport and compare to the cost of leasing and running a car then show your IP. As I say, because you're not signing a credit agreement you don't need creditor approval and if you can bring the reduction in your monthly payment to below 15% then you only need your IP's approval for the cost. So it is quicker too.

[Tina Shortland]

I think everyone agrees this car seems to be the best option for you under the circumstances and no doubt your IP will too however as we all know there is protocol they have to follow. If the reduction in your IVA payment needs to reduce by more than 15% then it will need to go to creditors which takes time even with Ips working as quick as they can. Stress to your IP the urgency and see what they can do. If it absolutely gets to the point that you have no transport and no agreement could you get a payment break and hire a car for a month while things get sorted?

Keep us posted.

Regards,

[Pennyless]

starman good luck with this.....I think many of us are in the same boat in relation to the neccessity of vehicles. Both my wife and I need seperate cars for work. I have a 2001 mondeo with 100k plus on the mileage and my wifes 2001 Focus has similar mileage so you can imagine what their value is....but on the other hand I dont have any concerns about parking at the supermarket and the usual fears of dints and scratches lol.

Unfortunately I can only dream of the day when I can afford to pay four figures for a car and my game plan is if one of the cars gives up the ghost then its onto "Gumtree" for anything with 12 months MOT and smidging of tax lol oh and far below the £1k mark.

One thing I would say is dont plan on the value of a vehicle being representative of its reliablity......an older less expensive and well maintained car can at times be just as reliable as a more expensive and newer model.

Then again, my Mondeo threw its petrol pump last month at a cost of £500...more than half the value of the car, but as I have my cars covered for breakdown repair with the AA for approx £20 a month, I only had to pay £25 excess, so with older vehicles I certainly think AA/RAC cover is the way ahead.

Good luck.

[shippers]

@starman2011, let me know how you get on, as i am in the same position as you.
Would also love to know the lender who approved you so would appricate you letting me know who they are as will also try them.

[starman2011]

Well no news today.. I was supposed to receive an email letter with a partial acceptance to me buying a new car which they said they were going to send yesterday.

This is a new question which i should maybe post as a new question but probably still relevant to the original post -

- Is an IVA company generally on my side or the Creditors ?
- Do you generally have an account/IVA manager who looks after your needs?


The reason i ask is that this scenario has quite worried me as all correspondence over the last few day's has been with what i can only describe as sounding like an office junior/work experience clerk. A quite pleasant sounding and fairly polite young lady.. but every time i asked a difficult question she has had to ask her manager.!

I am not being sexist or ageist or whatever but this is a very serious matter for me and it seems that i am dealing with a junior member of staff who is reading a script!

[Foggy]

Hi Starman. The IP is an independant mediator between you and the creditors. Their responsibilty is to see that the IVA terms are followed, by both sides, and that the creditors get what they are due. They do have to maximise the dividend to the creditors whilst also ensuring that you are fairly treated and not unduly finacially burdened. Some IP's manage the mid line very well, some lean toward the creditor and some toward the debtor.

Some companies assign you a supervisor / handler / account manager. others, mine included, don't and you get whoever picks up the phone.

Although the person you have been speaking to doesn't sound all that experienced, at least she has the sense to ask, rather than feed you porkies !!