Paying off CAR HP During an IVA

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Shadowcat14

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Post by Shadowcat14 » Mon Aug 17, 2020 11:54 am
Hi All,

I am currently in an IVA paying around £150 a month into my plan. Im about to do my first 12 month review and so far ive been able to stick to my budget. During COVID my partner has not worked and our income dropped, so the IP insisted her savings were used as "income". In reality, ive been able to cover the shortfall by being even more strict within the budget and spending less than my IP assumed we would on household bills. Also, not going out etc. My IVA is NOT a joint one. My partner has consierable savings and earns a "part time" wage via a grant.

Anyway, I pay £150 a month on my car, which is due to complete in January 2022. At this point these payments snowball into my IVA making it £300 a month and ill own the car outright.

However the car is now almost 10 years old and is costing much more than id like to keep running. Id do about 20,000 miles a year and ive been considering buying a new vehicle for some time. Ive decided I want to either trade in my car, or pay off the finance and sell it, and put the surplus towards and new vehicle. My partner has offered to pay for the new vehicle too.

As part of this change, my partner has also offered to pay for the Insurance in one hit - which saves me an additional £100 a month, each month.

My question is, if I pay off the car finance firm early do I need to start paying the extra £150 directly into the IVA? The agreement would have cost "us" the same money (they use our household income + partners savings already) .

Same for insurance, its still a recurring household bill. I get crippled on monthly payments
Having the car and insurance paid off, would for a year, give me an extra £250 a month on paper, but the "bill" hasnt gone.

Foggy

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Post by Foggy » Mon Aug 17, 2020 12:14 pm
If the car payment ends early, for whatever reason, then your IVA payment will increase by that amount. Likewise if your partner pays the insurance in one hit for you --- it is something you are not paying, so cannot claim the expense.

However, if they are using 'household income' vs 'household expenses' then the above mentione arguement would not apply and they should, then, alow the monthly payment towards the annual total.

Unfortunately you agreed, maybe without realising it, to the 'household income' calculations at the start--- personally,in normal circumstances, I would resist such tactics and look elsewhere, before committing, for an IP who does not do this. That said --- your payment, based on 'household income', is on the low side and it could have been that an IVA based on your income alone might not have been viable --- however, this should have been explained at the outset.
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

Shadowcat14

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Joined: Mon Aug 17, 2020 11:53 am

Post by Shadowcat14 » Mon Aug 17, 2020 4:14 pm
Thanks for your answer.

Your latter comment is exactly what happened.

My Partner had an income of around £25,000 when we moved in together last year. My income was around £32,000.

We moved in together knowing I was about to enter into an IVA, and budgeted our outgoings so that any one of our incomes would support our bills. A few weeks later, my partner suffered a mental health breakdown (not my fault :roll: ) and dropped down to essentially less than part time.

So, its household income. I absolutely dread the day she goes back to work full time as the financial loss to me will be massive.


Your point about "household" is exactly my thought process. Its still cost "us". In addition and IVA is based on year long monthly payments, the idea that they could ignore a bill because its paid at once rather than spread out strikes me as bizarre. We pay our council tax in one hit too, but they happily accept the yearly payment.

The question is, how would they know? I can evidence the bills and cost, I cant imagine for one moment they are constantly checking my credit file every month to see if its ended early. Ultimately, the cost to me is exactly the same....

Also confused why they'll take my partners income but refuse to acknowledge that she has a vehicle, running costs etc.

Foggy

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Post by Foggy » Mon Aug 17, 2020 5:12 pm
Some firms (Payplan among them, but there are a few others) take household income rather than individual income --- ignoring the 'I' in 'IVA' stands for "individual". Years ago I had a 'spirited discussion' with a Payplan agent on another forum --- which got me ejected! --- and their arguement at that time was that the solvent partner has enjoyed the fruits of the debts and so should contribute ... despite the fact that this is not often the case! Anyway -- that is by the by.

Anyway ... thinking out loud... if your partner has, as you say, considerable savings, could she 'gift' you a lump sum to make a full and final offer ( based on remaining payments ). Under the terms of your IVA she cannot lend you the money ( but, after all is done and dusted and you decided to give her the IVA payment at say £100 for a while, the IP will have no say or interest). I am assuming your IP is aware of these savings now if not it might be safer to let things lie and not give him or her any inkling !
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
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