Car finance question

[jason794]

hi me and my partner are 12 months into our iva we have a car on finance but the payments are high and one of the conditions of our iva was to try to get a cheaper car but we cant get finance but my dad as offered to take out finance for us would this be allowed

thanks

[Foggy]

If it reduces the payments on the car I am sure it would be OK -- but I would run it past the IP first. Also check the repayment situation with the current finance .... can you cover the outstanding balance with the sale of the car, or will there be a shortfall ? Are there any early repayment penalties they could slap on you ?

[jason794]

Hi thanks for reply yeah it will reduce my payments from £466 a month to £300 I had the finance when I entered the Iva so will any shortfall or charges fall into the Iva

[Foggy]

Hi thanks for reply yeah it will reduce my payments from £466 a month to £300 I had the finance when I entered the Iva so will any shortfall or charges fall into the Iva

You will have to check with your IP --- if the car finance was listed as a contigent debt it might be rolled into the IVA. If not, it is possible that any shortfall would be regarded as a new debt and might jeopardise the IVA --- a bit of an unfair situation as this is being done at the behest of the creditors -- in which case I would hope that they have allowed for the possible outcomes.

[jason794]

Hi the people who I spoke to at the time I took out my Iva suggested I could include any shortfall in my Iva because I questioned it at the time

[Foggy]

Hi the people who I spoke to at the time I took out my Iva suggested I could include any shortfall in my Iva because I questioned it at the time

That is a 'plus point' -- however, was it embedded in the actual proposal ? Is the car finance lender listed as a contingency creditor ?

Sorry to sound so pedantic ... but this has to be explored before you take any action that might end up 'pear shaped' .