www.iva.co.uk

Hi Guys
I have almost made the move to contact some IP's to start the ball rolling on an IVA. I have a couple of questions about cars. Both myself and my wife need a car for work and ferrying 2 young children around. My wife has a small family car on one of those 5 years of payments then a small ballon payment at the end (only 14 months into it and pay £99 a month). I have a 6 1/2 year old large family car worth i guess £2K ish but has no finance outstanding on it. I work 25 miles from work with no easy transport links. Wife works closer but is loosing her car park space soon and she ferries kids to school and if either are ill she is the one who leaves work early to collect them from school. In my eyes two cars aren't a luxury but a must have.how would this situation be viewed in an IVA.
Also my 6 1/2 year old car needs some work carried out urgently and normally I would have normally used credit card as it is around £350 worth of work for it to pass mot in Nov 09. How would this affect things if I started down the IVA path very soon.
cheers
Headbanger

how much is the small balloon payment?

Standard HPs are not an issue if required for work and value is not excessive.

My ford focus had nearly 4 years left to pay when I entered my IVA. When it ends your payments will rise accordingly, however the ballon payment is a difficult one.

In an IVA you get a maintenance budget, although these are very tight. Can you get the work completed with the money you save whilst your IVA is being proposed?

Hi Adam 16

Ballon payment is £2100 and not sure about your second question as I havent worked out income and exp yet and what I do with credit card payments and Overdraft while you are just starting the IVA process.
Cheers
Headbanger

Once I had commited to proposing an IVA I stopped paying any of my unsecured debts. I transferred my wages across to a new account (I chose the co-op) taking advice from my IP and on here.

I saved up the money I was paying on my unsecured debts for a rainy day and this allowed me to maintain my IVA through a short gap between jobs very recently.

You could potentially do the same to repair you car.

With regards to the balloon, one of the experts will be better placed to advise you. A possibility maybe that you could pay longer and not have the baloon, although at £99 a month this another 21 months (nd thats not allowing for interest) so that may not be acceptable.

Great info. loving this forum already.
I know you can hand the car back with no extra to pay once you have made half the payments onwards but how would you replace it once in an IVA. Also I think the company I work for is setting up a new flexible benifit of lease cars for employees where you don;t get credit checked as it comes directly of your wage at source. Wonder how all that works in an IVA. So many questions rattling around my little head.

You are normally allowed to continue paying for your car outside of the IVA if the finance company will allow it.

I believe that some people have been able to negotiate on the balloon payment refinance it, with the creditors permission.

Hopefully one of the professionals will be along to answer in detail shortly.

headbanger wrote:

Great info. loving this forum already.
I know you can hand the car back with no extra to pay once you have made half the payments onwards but how would you replace it once in an IVA. Also I think the company I work for is setting up a new flexible benifit of lease cars for employees where you don;t get credit checked as it comes directly of your wage at source. Wonder how all that works in an IVA. So many questions rattling around my little head.

You need to check you finance agreement about handing it back half way through.

Normally that clause is applicable to a standard hire purchase agreement, were as your agreement with a ballon is a PCP, so your break is at the point the baloon is due. But i do recall some PCP also having the 50% clause.

Thanks Adam16. I must check the small print as I have done it once before like that with a saxo but this one is a renault clio.

No problem at all headbanger.

It is also worth bearing in mind that if you are upto date with all your payments at present it will be easier to renegotiate your payment terms on the car now, rather than during or whilst you commence an IVA.

As part of my creditors meeting RBS wanted me to downgrade my vehicle, when I spoke to Bank of Scotland they were pretty blunt that regardless of my perfect payment record with them and that it was secured finance, they would not be willing to enter into another finance agreement with me whilst I had a damaged credit rating.

Seems like a daft question but how would you go about replacing your car during an IVA

You can ask your IP for a payment break in order to get some pennies together.

There are one or two firms out there who will finance a car for people in an IVA - the APR is high but you are more or less guaranteed a car.

It has to be with the permission of your creditors though.

You cant is the simple answer...

I am pretty nervous about this, I did a 30k last year, my current job is a lot less miles but as an industry we do travel a bit and I cant prefict my mileage for the next 5.5years. I may try to take a company car when I am in a position to.... as long as it doest affect my ability to pay into the IVA.

You are taking a very sensible attitude in asking these sort of questions whilst considering the right form of debt solution, Headbanger.

It may be possible for your partner to refinance her balloon payment when her agreement concludes, but she should explore this with the finance company as some will and some won't.

With regard to your car, consider carefully whether you feel it will survive for the next five years, and if not whether it is worth buying a new one on finance at this point, as without a car you cannot get to work to earn the money to fund an IVA in the first place.

If you do decide to change your car at this time ensure that the agreement you take out is hire purchase and not an unsecured loan.

Many finance agreements are actually unsecured even if called Motor Loans and if you took one out it would be another debt in the IVA and the creditor would not be happy. If it is hire purchase you can continue making the payments.

If in doubt check the paperwork for rights concerning 'termination and repossession'. If these are not mentioned it is likely unsecured and the new creditor may well reject any IVA.

My car had a balloon payment PCP plan tpye thing too. It came to an end and I sold the car for a small profit (made about £100 more than the balloon payment)
I then asked for and was granted a payment break for two months to fund another vehicle.
Went to the auction and bought an 02 plate vehicle worth £3,250 (according to Auto Trader) for a mere £800. Bargain!