IVA payments/term length help

manda1976

So my old car is limping along and I have paid of the finance.  My IVA company wish to update my payments from £150 to £321 p/m to incorporate the car payments that have finished.  My car is 11yrs old and needs a new clutch, battery and has a bearing issue which amount to the current value of the vehicle! My IVA company have said I can keep my repayments the same but have to lengthen the term of the IVA by two more years and I’ll also be paying £70 a month more to the new car finance company... if I keep my old car I keep the Existing term but pay £321 a month and have to fix the car I have. When I took the finance out they said the payments would go up when the finance ended but not to worry as they’d look at my finances and I’d probably be looking at a new car anyway so the payments etc would stay the same. As it is I’m being clobbered with 30.4% APR if I go ahead with the new car finance - I feel lost stuck and have even debated walking away from the IVA. I’m a single Mum living in a village with no public transport - no car no work.

any advice much appreciated 

mwarby

Has your IP actually allowed you to take on new credit ? Most agreements require consent above £500

Are you looking at a new car or a used one ? If new have you looked into a used car that will last long enough to finish IVA ?

How long has your IVA got left to run ?

It could be that although the repairs are more than car is worth, that you are best of reapiring the vehicle, as better bet than a used cr with unknown problems. My own car is 16 years old so age alone shouldn't condem it (although my mileage is low, which maybe why its lasted so long)

manda1976

Thank you for your reply.  They have agreed to car finance, but to keep my monthly repayments to the IVA the same I would have to extend the term of my IVA another two years and pay an extra £70 on top to cover the finance.  It is a 3yr old car I am looking at and the finance would be also over 5 years.  
The IVA currently has three years left to run at £321 p/m increased payments as my old car finance has finished.  I have been paying £150 to date and £156 to the car finance I already had in place at the start of my IVA.  I have now also to cover gas/electric debts and a council tax debt and my partner is potentially decreasing my maintenance payments by half.  Now I'm worried if I keep my existing car and explain that I have extra debts to pay and the reduced income they will add 2yrs to the term anyway as I can't afford the £321 they have requested.
My car is 11yrs old with 115,000 miles on the original clutch!!!

mwarby

I would avoid extra debt if possible. Have you discussed a payment holiday or similar to fun the fixing of your current vehicle, or to acquire another ?

While I can see why the current vehicle isn't ideal, I think the jump to 3 year old vehicle isn't necessary, you could easily double the vehicle age and still have something to get you through the rest of your IVA. You may also have more leverage once it becomes clear the car is no longer servicable, as its arguable that current car may keep going for some time with reasonable maintenance which should be budgeted for in your income and expenditure

The other issues will require discussion with your IP, I think a reduction in income would be treated differently from you wanting/needing a newer car. You also need to work out how you got into new debts and how to avoid this going forwards.

manda1976

Thank you, that makes sense.  
The issue has been my ex husband not paying maintenance on time/with-holding 2mths payments and £600 worth of car repairs I had to pay out and unemployment for 2 mths and seitching to universal credit.  Caused me to fall behind and it's so hard to keep on top of it all, despite all of this they still want to put my payments up.

mwarby

Have you had a review of income and expenditure ? I can see where IP is coming from re car loan repayments, but maintenance issues and unemployment aren't something you can control. There is supposed to be give and take in an IVA eg you get a payrise the payment goes up, your circumstances change for worse they go down, there are limits as to what the IP can do without going back to creditors, but if needs must they should do so(simply wanting a newer vehicle perhaps not, but to ensure IVA is sustainable yes)