My husband and I know that we need to enter into an IVA soon. My car is on a PCP contract - we are voluntarily terminating as it costs £200 per month, plus we can't afford the balloon payment. My question is - are we allowed to enter into car finance now to buy an older, used and cheaper car - just before entering an IVA. My husband is a police officer and thinks that it seems fraudulent. I am looking at different finance so that we would pay the car off and own it at the end without a huge final payment. I will need a car to travel to work and I know that we will struggle to obtain finance once the IVA has begun.
You know you are almost insolvent so you should not be looking at taking out new credit. Creditors would not look kindly on it. Do you know anyone who could finance a new car for you and you pay them back.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I agree that, having decided that you cannot pay your debts, it would be bordering on fraud to take out new debt now. This could be mitigated by taking a secured loan (secured on the vehicle ... HP ) which you would still have to repay outside of the IVA -- however, as Kallis says, new finance of this kind might turn creditors in the IVA against you. There is also the danger that the finance will have an insolvency clause and the vehicle could be repossessed.
With probably more luck than judgement I survived on 'E-Bay Bangers' during my IVA !
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Thank you both. I hate it when he’s right We don’t have anyone we could ask to buy us a car.
My husband does own a car but it’s 12 years old & is about to clock 200k miles. My biggest worry is that it won’t last the 5-6 years of IVA/poor credit score - esp when I start using it for work. At the moment we don’t use it much as my husband can currently walk to his work.
Just a last question - I’m guessing it counts as new finance if I could get my pcp contract altered to hp finance for the balloon payment? We’re right at the end of our agreement - only 2 payments left on pcp contract.
It is worth asking the PCP company, whilst being upfront about the IVA --- some companies, not many, I admit, have refinanced a balloon payment during an IVA ( with the permission of the IP ). Sometimes (with the IPs support) creditors do see the wisdom of 'no car = no job = no income = no IVA payment'.
I would start engaging with an IVA provider and talk this all through. I would advise chatting to a couple and, personal opinion, I would avoid the larger firms who tend to try a 'one size fits all' approach. Although they work well for many, many clients, they do not tend to deal with unique issues, but try to sweep them under the carpet.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
We don’t have anyone we could ask to buy us a car.