Voluntary Surrender or Termination

liamjay

Hi all,

Im just after some advice….

I am currently in a IVA and when it was accepted allowances were made for my car payment to black horse.

To cut a long story short, things have changed rapidly and my income has stayed the same, well it’s actually due to go down and my expenditure is going to rise. This means that I can no longer afford the vehicle that the allowance was made for.

Im ok with that, My dad is going to gift me an old car to be able to run, and on completing my income and expenditure form, if I get rid of the current PCP vehicle then I can still afford to live etc and afford my payment to my IVA.

I have spoke to my IP and they have said that I can terminate the agreement with BH and the negative debt will be passed on to my IVA as it was taken out before the IVA was accepted.

(So I get all that)

However……

I have spoke to BH over the last couple of days and they have told me that I must write a letter Voluntary Surrendering the vehicle, drive it to an auction house and they will pass the liabilities to my IVA.

BUT.

The figure is massive!

I purchased a car on a PCP plan for £31,650.98 with zero deposit
The total I would have to pay would be £38,207.62 (including balloon)

My monthly payments are 47 payments of £455.46 followed by a final payment of £16,801.00

I have currently been in the agreement for 12 months (again circumstances changed quickly due to no fault of my own) So that is £5465.52 I have paid.

My current settlement on the Vehicle is £28,846.49

The vehicle is worth currently £24,000ish trade value.

They have said I need to Voluntary Surrender the car and my liability is £14093.75 which will be passed on to the IVA.

BUT how is this if my settlement is £28,846.49, shouldn’t it be closer to £4846.49?

Is this the same as a Voluntary Termination? or is that more expensive/cheaper?

Im just a bit stumped how my settlement can be 29k and they get 24k back and still want the remaining settlement including interest when I no longer pay monthly or have the vehicle?

I need to get this sorted, as my insurance for the car is due in a week and I do not want to/can afford to insure it.

So should I voluntary terminate or surrender. im so confused.

Please advise and thank you in advance

Also just to add, as this might change things quite a bit, I received a letter from BH when I did my IVA saying that they intend to terminate my agreement on 27th March 2018 under section 76(1) of the consumer credit act 1974 as I had made an application for a voluntary arrangement.

sourcrates

Hi,

If they are adding the debt to your IVA then it matters not a jot what price or settlement figure they quote you, as you wont see a penny of it anyway, and neither will they.

They will only receive whatever % payment your IVA pays them.

liamjay

So it don't matter what way then.....

on another forum they were telling me do not under any circumstances VS only ever VT and I can not see what difference it makes as i am nowhere near to the 50% mark anyway, so either way VT to VS there is only a 500 difference, is anything i would have thought VS would be better.

So confusing

MEM62

The difference in your figures is easy to explain.

You are basing yours on achieving the trade-in value for the car. The finance company will base theirs on what they are likely to receive at auction after costs -which is, of course, much lower. But as advised, the impact on your situation is minimal, if any.

[Deleted User]

VS is when you have not paid enough (50%) and VT is when you have paid the 50% mark. If you've not paid enough and you can't afford it, the only solution open to you is to VS. Either way by entering into an VIA it will affect your credit file for 6 years.

sourcrates

It wont matter what you get as the debt will go in to your IVA, plus if you were to get any cash back it would have to be paid into the IVA for the benefit of your creditors.

Different rules apply when you are insolvent.

Xbigman

liamjay wrote: »

Hi all,

Also just to add, as this might change things quite a bit, I received a letter from BH when I did my IVA saying that they intend to terminate my agreement on 27th March 2018 under section 76(1) of the consumer credit act 1974 as I had made an application for a voluntary arrangement.

That part changes everything as the agreement is terminated anyway. Ask BH when they are picking the car up, its their problem now.


Darren

PS check your insurance as you might no longer be able to use the car legally.