URGENT advice for IVA

Stressed_NW

Hi Fiat

Can you change your car once youre in an IVA? Mines 5 an half years old now and obviously the older it gets the more you pay out on it. Will they allow it and can you get HP?

UpToMyNeckInIt

This is where IVA firms seem to differ massively, with a lot depending on each person's situation. You will need to run this query past your IP.

I'm running a '56 plate myself, and am hoping it will see me through. Given that yours is in 'negative equity' and on HP, I suggest that is your best bet as well.

Just a thought: Have you got / considered getting 'Gap Insurance'? So that if you write the car off in an accident, the difference between the vehicle value and the HP is covered (not sure if the IVA would cover this automatically). Worth a look, and again speak to your IP on this point.

You don't want to have a big smash, only to find that your payout goes straight to the HP firm, with you being left with a bill for the difference AND no car.

There are firms like 'moneybarn' who will lend to IVA customers, but the APR is horrendous (30+% as I recall). Goes without saying, your IP will only sanction this if you can 'afford' it without detriment to your pledged creditor dividend.

The most likely option if your car gives up the ghost mid-IVA, is that your IP will sanction 2-3 payment breaks (which get tacked onto the end of your IVA) to allow you to get a cheap runabout.

Stressed_NW

Thanks UTMKII

but cant afford GAP insurance. Do you think would allow me to change car as long as payments stayed the same? How are oeople finding their yearly review. Are allowances rising as per cost of living! Also what if you have a couple of big payouts on car; tyres, clutch, exhaust etc., is this taken into account on the review?

UpToMyNeckInIt

Stressed_NW wrote: »

Thanks UTMKII

but cant afford GAP insurance. Do you think would allow me to change car as long as payments stayed the same? How are oeople finding their yearly review. Are allowances rising as per cost of living! Also what if you have a couple of big payouts on car; tyres, clutch, exhaust etc., is this taken into account on the review?

Hopefully one of the forum experts will be able to assist with your car query, but again, runnin g this query past your IP on Monday is probably your best bet.

Personally, I think you are stuck with it for now. If you do manage to sort something out however, please let us know how it worked out.

The whole allowances vs true cost of living is a hotly debated subject - check out the 'IVA Support and Discussion' thread.

Regarding what is deemed 'reasonable' expenditure: All IPs that I’ve come across make reference to the Stepchange Budget Guidelines, which can be downloaded here.

https://docs.google.com/file/d/0B7LabJy69BP1M0gxeHQ1SDFiN1E/edit?pli=1

(Sorry, have not yet been able to get hold of the latest version that came out in October, but the figures only differ by a couple of quid here and there).

It is well worth a read, as it covers every form of expenditure, right the way down to allowances for hairdressing, kid's school dinners, meals at work, even hobbies etc.

If you are careful to correctly record your income and expenditure, your IVA payment should be set at quite an affordable level. I have come across people who underestimate their expenditure and subsequently have difficulty.

For monthly car expenditure, you can make allowances for: your car insurance, £130-£202 (fuel & parking); £10-£30 (spares & servicing); and up to £15 (breakdown cover). I stress that these are guideline figures, and larger amounts can be negotiated - depending on how good your IVA firm is. But, not really quite enough if as you say, tyres, clutch exhaust etc. need replacing. For these items, you may be able to negotiate a 'payment break', which are then added onto the end of your IVA and repaid accordingly.

FiatFan_2

Hi SNW,

This is where I have one of my many frustrations with SC. Their advisor pre-iva confirmed that provided we didn't compromise the agreed iva payments, then yes we could change the HP car. However, when it came to it, the IP put the foot down and stopped the swap of cars. The HP car is now 8yrs old and my banger is 16yrs which I am allowed to freely change provided I justify where the extra money came from, i.e saving overtime/bonus etc. 4yrs to go, the HP car should make it through, banger is up for MOT next week so will hope for the best.

As for review, make sure your surplus cash is the same as the agreed future payments by increasing allowances to match any wage increase.

Anondebtadvisor

The issue with car finance when in an IVA is often that you cannot obtain further finance to fund the car, although there is some high interest lenders who will consider those in an IVA the payments are often a lot higher and creditors will not usually accept HP over £250 per month

Stressed_NW

Just quick update and few Qs. Sent papers back today for voluntary repossession. IP writing up IVA ready to go to creditors, but wants to go through I/E again. Does the IP work on my side, therefore getting me best deal possible or are the impartial?? Been told that when my car finance finishes debtors would want the money that i was paying. The same goes for student loan when that finishes. Would they want the full amount or just 50% as ive read somewhere else?? Im getting around 1.5-2k pay rise in april, would they also want all of that?? Our expenditure is more than our income whn done the real figures (3 kids if varying ages. Dont live near school or work). Dont know how weve been managing really. So weve had to cut back to meet a 200 pm payment offer. Maybe we'll gave to offer less. Also g/f will want to change her car in few years. Its obviously all my debt frombefore i met her, so would she be allowed to change hers and carry on with finance, or would they want her money aswell??

Anondebtadvisor

If your car HP and student loans end during the IVA you will be expected to pay this into the IVA unless your expenses have increased at this time.

Your girlfriend can change he car or do what she likes if she is not entering the IVA, but they will take her income and expenditure into account so they know she is paying her fair share of household bills.

If you get a payrise this will be looked at when you have an annual review of your IVA and your payments may increase.

You might also consider asking your IP to exclude any lump sum pension, as often if you have to retire this is a windfall

Anondebtadvisor

Is the property you have surrendered in joint names or in your name only?

UpToMyNeckInIt

Hi Stressed,

Your IP’s role is that of ‘honest broker’ – supposedly working to find the an agreement which is acceptable to both you and your creditors.

As for the 50% increase in future income – CHECK THE WORDING OF YOUR PROPOSAL. Some IVA’s apply this to total income (like mine, but then again, I’m self-employed). However, other customers report that their IVA applies the 50/50 rule only to ‘overtime and bonuses’, and that with something like a permanent pay-rise may trigger a complete review. Saying that, anything up to the first 10% of your current take-home is SOMETIMES exempt. (Called the 10/50/50 rule)

Just tell your IP, that you will seek a second opinion unless they apply 10/50/50 rule to all extra income: The first 10% ignored, but 50% of any net pay increase after that, gets paid in.

Your affordability should be worked out only on your income and expenditure. Saying that, your IP will expect your g/f to make a proportionate contribution towards the household bills. So they will need a breakdown of her I&E (although she will not be restricted to the same rules that are applied to you).

Not sure about car finance, but I think you are stuck with the student loan (but this will be factored into your expenditure).

IF IN ANY DOUBT WHATSOEVER, remember that until your IVA is proposed, and accepted by your creditors, you are at liberty to seek a second opinion from another IVA firm.