In an IVA but can my car finance company help reduce payments

canonman

Hi all asking behalf of a family member. 

They have recently entered into an IVA however the car which was HP and has been paid for a year. However she is struggling to pay the £450 loan. Car was about £16K 

can the car finance company offer her any support. She reply’s on it for taking kids school work etc but the cost of the car is now to much.  

She looked at trying to sell to webuyanycar however what they offered it’s not worth selling it as it leaves her still with large debt and then no transport. 

Thanks for any advice.

Grumpelstiltskin

First bit of advice was an IVA the best way to go?

Who advised her to enter an IVA, a debt charity or an IVA salesperson?

If you can answer that then we can advise.

canonman

With the multiple debts and card the IVA was the way to go after getting financial advise. 

She contacted an IVA company who then did the rest. As I explained above the she told the IVA company the car was really important as it’s 7 seater for her kids etc. this was not included in the IVA as her partner had helped make payments on the car. 

Thanks for the help 

Grumpelstiltskin

Just because someone has multiple debts doesn't always mean an IVA is the best solution.

Without more information it's impossible to say she made the right decision, if she didn't then the way forward maybe to get the IVA to fail.

An IVA is a very serious decision and many people are influenced by salesperson into thinking it is the best way so that really needs to be sorted out first.

sourcrates

Is she a homeowner, how much debt does she have?

IVA`s protect assets, such as a house, or an expensive car that is essential.

However, none of that means anything if she cannot afford to service these payments, this is why good budgeting is paramount before you agree to an insolvency solution, lots of IVA`s fail for this very reason.

So, what went wrong, she agreed to the payments, so why is she now struggling to make ends meet?

canonman

sourcrates said:

Is she a homeowner, how much debt does she have?

IVA`s protect assets, such as a house, or an expensive car that is essential.

However, none of that means anything if she cannot afford to service these payments, this is why good budgeting is paramount before you agree to an insolvency solution, lots of IVA`s fail for this very reason.

So, what went wrong, she agreed to the payments, so why is she now struggling to make ends meet?

Not a homeowner. 

She originally was being paid some money towards the car from her X and they are now no longer together and he has stopped paying. 

She was 16K in debt from loans and store cards and consumer credit for sofas etc. 

Grumpelstiltskin

OK not a homeowner and only £16 K in debt an IVA was totally the wrong way to go.

I guess she never received advice from one of the free debt charities such as Stepchange but she went straight to an IVA company, who only employ sales people and not advisors.

Hopefully Sourcrates will be back with more advice.

canonman

Grumpelstiltskin said:

OK not a homeowner and only £16 K in debt an IVA was totally the wrong way to go.

I guess she never received advice from one of the free debt charities such as Stepchange but she went straight to an IVA company, who only employ sales people and not advisors.

Hopefully Sourcrates will be back with more advice.

Thanks for this. She just wants to pay as much debt as she can but is worried about her car not so much the values of it just the 7 seats for kids and it’s reliable. 

Grumpelstiltskin

She needs proper advice that's why I said wait for Sourcrates to come back and give you advice, but it would be easier if she came on here herself.

She needs to realize the debt is unsecured and nothing terrible is going to happen if she stops paying the IVA.

sourcrates

The finance company may be able to offer reduced payments, that is something she will have to ask them, however anything except full contractual repayment could trigger repossession of the vehicle, so it's very unlikely they will accept less.

Really, she is barking up the wrong tree, it`s the IVA that is the restrictive element here, for such a small amount of debt, there are much more suitable solutions.

If this car is essential to her, then she needs to be reassessing her whole approach to this, I would say debt management would have been a better choice for her, that way she can control what her creditors receive.

It`s a sad fact that lots of people fall for these social media adds where companies claim to be able to write off massive chunks of your debt, with smaller debts, it doesn't always work that way, IVA`s were designed for those with assets to protect, who could not go bankrupt, but had massive debts, anything from 30k up into the millions, they are certainly not ideal for those with no assets, and less than 30k of debt.

She needs to get advice from one of the free debt charities on her next move, whether that be failing the IVA, or changing cars, they appear to be the only choices here.

ToxtethO'Grady

I hope this helps your family member understand about the advice given.

The HP car is a living expense for her family, the IVA payment should be the available amount after all living expenses are covered for the family.

It should be the IVA payment changing, or the IVA being terminated as unaffordable, after she talks to her IVA supervisor rather than the HP company having to make changes.