www.iva.co.uk

I am writing this as I am trying to find more information for my son and daughter in-law both of whom have IVA's.

They both travel to work in different directions from home and at times where they can't share one car to get there. One of the cars, an old Corsa has always needed one thing or another thing doing to it to keep it running, on what seems like an almost weekly basis. A couple of weeks ago it finally gave up the ghost. Without going into great detail, the engine is knackered. The cost of repair is going to be far greater than the value of the car, so basically it is just a pile of scrap metal. Whilst running now, the second car is not going to last another 4 years either. Over the last couple of weeks they have got by, by using child care and cadging lifts. That can't go on much longer though as whilst people don't mind helping out for a while, the goodwill that they are relying upon, will soon start to dry up.

Financially they are being squeezed quite hard and my son is constantly worrying about failing. There is certainly no spare money to save for a car. I would have thought that people with an IVA are not going to be uncommon if driving an old banger and old banger's by their nature don't last for ever. I would have thought that companies administering IVA's have come across this situation before, so my son asked them what his options were. They pointed out that he has an allowance on the IVA for car repairs, so he could use that money to get a car. As he said, that money was for repairs and that is what he has been using it for. The response to that being that he should find a car and tell them how he is going to pay for it. Surely if he had the money to buy a car, they would have had it off him in the first place.

This must be a situation that isn't a first, whether it's a car that breaks down or a central heating system that fails, what is somebody in this situation supposed to do? I thought the administrators were there to help debtors, but it is clear in this case that once they got signatures on the paperwork they haven't really given a stuff.

I was actually in the same position during my 5 year IVA not once but twice.

The first time I had both a car (4x4) and a motorbike and as I did a high mileage the costs were shared between the two with the bike used most of the time for lower fuel costs, etc.
The car then decided to sheer a pin holding the timing chain and bent valves so goodbye engine.

Stepchange allowed me to sell both the car and bike to buy another car (old Range Rover) and put all the repairs and fuel costs of both the bike and car towards running it.

A couple of months from the end of my IVA this cars gearbox and turbo were on its way out so again had to ask Stepchange for advice.

They said as long as it did not affect my payments to the IVA then I could finance a replacement car with Moneybarn, who I believe are the only lenders willing to lend whilst in an IVA.

The allowance I had for repairs and the savings I made on fuel (RR was 20mpg) as well as the extra bits I was now keeping from wage increases (50% allowed to keep) it paid for my car for the 4 months until the end of my IVA and from then the money I was paying to the IVA was then free to go for any repairs needed on the new car.

Moneybarn is not a cheap option due to the high interest rates involved though, but a newer car will (or should) cost less in repairs than an older one.
Is there any chance of you being able to obtain finance in your own name and them paying you back from their repairs allowance?

With things like heating systems etc, their IP has the facility to grant a payment break for 3 months to be added on the end to allow any emergency events.

Hi. Unfortunately it's a misunderstanding that the Supervisor is there to help -- he is there to supervise. That said, a helpful IP would assist where possible. Most will agree a payment break to allow you to save for a (yes) banger to keep going --- after all, no car = no work = no income = no IVA payment!

By offering a break they are not losing anything as the lost payments will get added back on at the end, so to refuse is pretty churlish (assuming breaks are allowed for within the terms -- as they are in the vast majority of arrangements).

Of course this will depend on which firm you are with --- some are pretty vampyric, whilst many are sympathetic.

There is little the Supervisor can do however they could, as Foggy suggests, allow a payment break to give them the time to sort something.

Yes the vehicle finance is possible and as said above , would be through moneybarn,
The broker ...car-finance 24/7 will bend over backwards and jump through fire to get you aboard !!!

They really need to make sure that's the right way to go though , if they can get away with going down that path then the better ...

A deposit is still required , also admin fees to the broker and repayments for 3 yrs , also vehicle is only allowed to be bought from car dealers registered with car finance 24/7 .and less than 6 yrs
I.e. ...you tell them what your looking for and they search through there registered dealers for that vehicle and within the moneybarn criteria

There ip also needs to sign an approval to go ahead with this plus the usual pay slips bank statements etc to send to 24/7 ..
It's quite a process !

A word to the wise though ... 24/7 and the registered car dealer do very well from this !

When i collected my car , the dealer , did give me some extras for the car foc ... he was sympathetic to our cause , as they know why you've gone through the broker !
He did say he'd done very well from the car sale , better than a normal sale !!!

As said ...think about the affordability !!!

Mine was through Midland Credit as a broker.

My broken RR was taken as the deposit of £500 against the £5900 replacement vehicle.

There were stipulations as to the replacement vehicle in that it would have to be under 10 years old at the end of the finance and a min amount borrowed of £5000.

Mine was over 4 years and was allowed to purchase it from any VAT registered dealer.

The IP will usually need to agree to any credit over £500.

Many thanks for all of your replies, it is very touching, (not just for my question, but others also,) when people use so much of their time to help others. Much appreciated.

I guess a car loan looks like my son's only option. Unfortunately, I know he his being squeezed so hard, he just couldn't afford to pay it. I think I we will have to have a look at the bank of dad.

Thanks again.

Just bear in mind that due to his credit rating being damaged he might not be able to get a loan.

Bless you Steve! You could take out finance for him and let him pay you back as and when.

kallis3 wrote:

Bless you Steve! You could take out finance for him and let him pay you back as and when.

But don't mention it to the IP ! A loan is still a loan, even from the Bank of Dad !

I did say as and when! Could be at the end!!

Had a thought. Son and daughter in-law are 16 months into 60+12 month IVA. Due to an increase in earnings, the IVA payments have risen jointly from £426 to £593. As the creditors had accepted that they would be getting £426, are PayPlan able to authorize the use of the excess, (without going back to the creditors,) to be used for a purchase of a car? More to the point, are they likely to agree it? To date, they seem very willing to take extra when there is a pay rise, but don't seem to recognize that the cost of living increases also.

Another possibility would be me offering up a lump sum as final settlement plus a further amount to purchase a car. I can then work things out with my son without crippling him. With a lump sum, is any offer based on what is being paid now, or what was originally agreed?

The original £426 was based on what could be afforded at the time but was subject to review and change. As they can now afford to make higher payments their contributions have to be increased as part of the IVA terms.

They could argue that their expenditure will increase as they need to do something about the car but it will be up to the IP to accept this.

The lump sum would be based on number of payments left multiplied by the £593 (unless you can argue the sum should be lower due to the increased car expenses).

Do they have any property? The equity point will need to be dealt with and the lump sum offer might need to include an extra year of contributions for this.

Regarding a F&F offer -- they are looking at paying over 56 more payments ( assuming the 12 months in lieu of equity kicks in) at £593 = £33208. I would hazzard that you would be looking at an offer in the region of £30k to end the IVA early!

Might it not be better for you to simply buy a modest car and allow him the use of it ?