www.iva.co.uk

I have a contract hire on a car that has an overdue amount to the lease company of around £1,500 - to add to this, the car has just had its wing mirror taken off in Sainsburys car park whilst i was shopping (Just great!)

My IVA was approved two weeks ago, so i am keen to remove any large ongoing payments too.

my question is, do i need to clear the outstanding debt, or because its a secured debt against the car, is it ok to just give the car back in lieu of the payment?

I know i should endeavour to make the payments, but I am trying to get straight, and feel very close, having had my IVA approved. Getting rid of any car cost liability would be a great help and my company are prepared to arrange a new company car on a cost neutral basis to me, but clearing the outstanding amount scares me as it could mean i have to start afresh with a negative balance - boo hoo

any advice would be much appreciated.

tnx

I presume that you are supposed to contine to make payments to the car as well as your IVA payments?

You can ask them to repossess the car, but if you do, then the amount you have been paying for the car will need to be paid across to your IVA.

What will you do for transport?

Was your ongoing lease payment shown in your Expenditure list within your Proposal?

Sorry, may have mislead you a little by accident. I will have a new car, but it will be a company car and this will cost me the same amount monthly as the contract hire car. The difference is that company cars are more costly and the difference will be paid by the company so i end up with the SAME monthly cost. The difference is that i wont be liable for additional cost in the case of other people knocking off my wing mirror nd fleeing etc. My monthly outgoings will be fixed.

the issue I have is that I dont really think I can find the £1500 it will take to bring the account back into credit without putting myself into a dark place - i simply dont have £1500 spare (Obviously)

can i just ask them to take the car back?

You can ask them, but I'm sure that I have read on here that if they sell the car and there is a shortfall, they will chase you for that.

I don't know if handing it back would wipe out the money you owe. I take it this wasn't included in the IVA?

I'd have a word with the finance company and see what they say.

i just wondered because i thought it might be classed as a secured loan - set against the car

dunno!

You could be right. I suppose if it is a lease car then it could be secured, I'm not sure how these things work to be honest.

Hopefully Melanie or David or Size5 will be along and anwer the question for you a lot better than I can.

I don't know if this helps but here goes!!
When I entered my IVA I hadan expensive car which I was paying for monthly. Part of my IVA agreement was that I had to hand the car back and get a cheaper one which was more affordable.
I couldn't sell the car as I would still have been laible for the shortfall. I handed the car back to Mercedes - I just dropped it off at their show room and handed in the keys - nerve racking but it went smoothly.
The outstanding balance was added into my IVA and I got a lease car at half the cost of the merc.
I hope that helps.
Good luck with sorting this out,
Best wishes,
Chardonnay

I think this is a strange one as you are only contract leasing the vehicle. If it was purchased on HP then it is clearly a secured loan, which can legally be terminated without penalty after repaying more than half the full agreement value.

However, as it is a lease contract you don't really have the security (or even the loan [?] ). But the lease contract will include the termination options, which will probably state you become liable for the remaining, or partial, contractual payments. At that point I would of thought that it can only be classed as an unsecured debt.

Having read other posts, some people seem to be able to get other debts added on to an IVA after it has been agreed. But best to check that out with an IP...

Well if you hand back the car to the lease company whatever you are owing will be added into your IVA. If your employers are then going to lease a car on your behalf which they are responsible for the payment - no problem. The problem arises is the amount that your employers want you to pay them for the use of such car.

Can I suggest that you discuss this directly with your IP, as the debt due to the hire company ought to have been disclosed as a contingent creditor.

As you are offering a lump sum based IVA, from memory, this will dilute the dividend available for creditors unless you can find some way of paying over additional funds to counter this.