Car Finance IVA
Applying for Car Finance
If you are considering entering an individual voluntary arrangement, you may be surprised to learn that you will usually be able to keep your car finance, but it can depend on the circumstances.
If your car is valued at over £10,000, the creditors may ask the insolvency practitioner to modify your proposal so that if you renew your car finance at the end of your current agreement, you downgrade the car in terms of value to around £10,000 or less, however, exceptions can be made so it’s important to discuss this from the outset.
Being in a debt solution shows that you are committed to resolving your debts, however, you may still find it difficult to get car finance. You may need to use a specialist car finance lender such as Moneybarn who understands how being in an IVA can impact your credit profile.
For those currently in a debt solution, you will normally need permission from the Insolvency Practitioner (IP) dealing with your case to obtain a credit line of more than £500 – therefore you will need their approval if you want to obtain car finance.
If you do not get permission from your Insolvency Practitioner before you get car finance could ultimately cost you as you will be in breach of the terms of the debt solution.
Points to be aware of if you are considering entering into an IVA with car finance:
- You are not guaranteed to be approved; we must get most of your creditors to agree to the proposal.
- It is a formal agreement so you must maintain the payments, otherwise, it can fail – allowances can be made for a sudden drop in income such as unemployment or sickness periods.
- It will affect your credit score – an IVA will remain on your credit file for 6 years from the date your creditors agree to it. If your proposed term is for 5 years, it would remain on your credit file for a further 12 months at the end of your IVA.
- You must owe at least £6,480 to enter an IVA. If you owe less than £6,480 you may qualify for other debt solutions, we can discuss the other options available to you.
- Your details will be listed on the insolvency register.
- If you currently have a vehicle on car finance and the value is considered excessive, you make be asked to downgrade the value of your next car when the current agreement comes to an end.
You can check to see if you qualify for a debt solution by speaking with a Personal Finance Manager by applying online.
We assess your circumstances based and will assess all available debt advice solutions. Please find below a list of debt solutions we will assess for:
Debt Management Plan (DMP) – click here for more information on a debt management plan.
Individual Voluntary Arrangement (IVA) – click here for more information on an IVA.
Debt Relief Order (DRO) – click here for more information on a DRO.
Bankruptcy – click here for more information on Bankruptcy.
Free and impartial money advice is available from the Money Helper, an organisation set up by the Government for people in debt.
If you have used our online application form, we will contact you to run through your income and outgoings and then discuss all your options so you can make an informed choice. At Debt Support Direct we offer all statutory debt solutions in England, Scotland, Wales, and Northern Ireland so you can choose the debt solution tailored to you and your circumstances.
If you have an attachment of benefits and you have then chosen the debt solution that you feel is the most appropriate there will be some paperwork to fill in to put the debt solution programme in place.
Our debt advice is free, non-judgmental, and friendly so if you are struggling with debt, speak to one of our experienced debt experts for a confidential chat on 0161 549 9848.