IVA and HP / PCP

HH1983

Hi guys, thanks for taking th time to read and I hope I am able to get some clarity.

I've very recently received from advice from step change who believe I should consider a IVA. I would be doing this jointly with my husband as we both have unsecured debt.

We each have a car, one on HP and the other PCP. Step change have stated its classed as an essential bill therefore it would not be included within the IVA and we should be able to continue to pay as we do now.

I've read terms and conditions of the contracts, and both agreements state that they have the right to terminate the agreement if 'there is a bankruptcy petition or meeting of creditors is called'. I assume the latter refers to IVA.

I live very rurally and commute 50 miles a day all told to work. We have 3 children and need 2 cars. The step change advisor gave the impression we'd be able to keep the cars providing we continued to pay for them, but I've read a few horror stories regarding repossession anyway, especIlly relating to Ford credit of which we have the HP.
Has anyone had experience it could enlighten be furthers.
I want to make sure I go forward knowing ALL facts before changing my circumstances so drastically.

Many thanks in advance x

mwarby

I'd agree that meeting of creditors is referring to an IVA or equivalent.

It's possible that this agreement could be cancelled, but they have little reason to if still being paid. If a meeting of creditors asked them to accept a lower payment this would be different, but thats not whats being proposed.

Another issue to consider is what happens after your last monthly repayment, is the car yours, or do you need a final repayment. There have been threads where this has caused problems further down the line

HH1983

Ok, so the family car is on HP and will be ours, the smaller work commute car is on PCP, which will require a lump payment.
We live rurally and need 2 caes, preferably reliable ones.
I wasnt sure that if the clause in statement said that rhat they would just repossess, in which case there is a possibility of losing our jobs etc...

HH1983

I've also read a few horror stories about ford credit repossessing cars 1/2 years after IVAs have been take. Out even though payments were made?

mwarby

HH1983 wrote: »

the smaller work commute car is on PCP, which will require a lump payment.

This you and stepchange can plan for, could arrangements be made to save for this during IVA ? if not what will you and stepchange do ?

The other stuff is limited in what can be done or planned for. An IVA is a alternative to bankruptcy, which will almost certainly be worse car finance wise.

Its certainly not in creditors or IPs interest to put your employment at risk, although there might be circumstances where you have to downgrade, for instance if a car is repossessed you might have to get an older\cheaper one

Have you spoken to more than one potential IP about this ?

HH1983

We could save the £1900 within the 2 1/2 years remaining on PCP that's no problem.

I've purely only spoken to Stepchange after completing a debt relief assessment online.

They mentioned bankruptcy was an option but I don't need to consider that and I certainly don't want that route if I can help it.
I want to pay my debt, after all I created it, just in a more manageable way in which my children won't suffer.
Thank you for your advice x

mwarby

HH1983 wrote: »

I've purely only spoken to Stepchange after completing a debt relief assessment online.

it pays to look around IMHO, an IVA is normally 5-6 years, which is an even longer time if you and IP don't get on. I personally chose a smaller firm