I am currently debating on wether to enter into an IVA but I am worried about what will happen to my car. I have unsecured debts of around £28.000 not including my car. I have only just purchased the car 2 months ago (on PCP finance). I have now been informed that due to government changes I am no longer able to get any overtime from work (I work in the rail industry and all overtime has been cut) I need my car to get me to work and back so can't be without one but see no other way of dealing with my debts that I can no longer afford to pay because of the overtime ban. I currently pay around £650 per month on the debts (not including the car) and could realistically afford to go to around the £300 per month mark.
Any advice and help would be very much appreciated.
You need to discuss the whole picture with a couple of IVA providers as they do differ in the way they operate IVAs. However, although, in most cases, the payment for a PCP is included in allowable expenses the balloon payment will be another, altogether bigger, hurdle. A few PCP lenders have agreed to re-finance at that stage, but most will not and, realistically, the car will go. Also many IVA agreements build in an increase of the IVA payment at the time the PCP payment ceases ... so watch for that as that will hamper any affordability for refinance should it be available to you.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014 http://foggy.blogs.iva.co.uk