IVA Settlement and Credit File

city_2

Hello

This is my first post.

My friend has recently finished an IVA early by having it settled with agreement of all the creditors.

He is comfortable that all his accounts have been shown on his credit file as settled with any outstanding balance (default) shown.

My question is: One Company (Large vehicle finance dept.) has shown the account as settled but shows the default amount as appx £36,000.

This is confusing my friend as the original lease agreement was for £38,000 for a vehicle which was handed back after 3 months and 3 payments. They have simply acknowledged that the 3 monthly payments have been made but not that the vehicle was received back?

I only assume this as they have told him when directly asked by him that he still owes £36,000 and the account will be shown as such.

My understanding is that they would ordinarily take the vehicle back, perhaps auction it and deduct the price attained off the outstanding amount owed?

My friend is comfortable if they want to show him appx. £6000 in default if necessary for costs and the difference in what they would have attained for the vehicle at auction or re-sale, but to show £36000 still owed when they have had the car back?

Can anybody advise if they can do this or whether this should be challenged?

Thanks in advavance.

Foxy-Stoat_3

I guess your friend has still defaulted on the contract that ststes the remaining payments added up to £36,000.

You could ask your friend to enquiry with the finance company if the records can be changed to reflect the auction value but they may of just leased to out to someone else. But it will be very little difference as your friend wouldnt be getting credit again for at least 6 years after the IVA was started. As long as the dates tie up, in 6 years the records will be removed anyway.

FoggyBrain_2

A default is a default, regardless of the amount showing. As long as he is happy with the default date stated in the report, it will drop off in the fullness of time.

city_2

Thanks FoggyBrain and Foxy-Stoat for your replies.

It probably isn't the news he wanted to hear. I think the assumption was that the goods have been returned so how could the balance remain so high?

Just like Finance where you obtained £38000 cash, paid back £2000 in payments then returned around £30000 cash they could only show a default of £6000?

It looks as though this is very different.

I think it will be wait for 6 years, then it will drop off anyway.

Regards