Car Finance IVA

Car Finance when in an IVA

If you are considering entering an individual voluntary arrangement. In that case, you may be surprised to learn that you will usually be able to keep your car finance, but it can depend on the circumstances.

An IVA is a debt solution that allows individuals to repay their debts over a period of time, typically 5 years, and it is recorded on their credit file.

Some lenders may be hesitant to provide car finance to individuals with an IVA on their credit file, as it indicates that they have a history of financial difficulties. However, there may be specialist lenders that offer car finance to people with IVAs.

It’s best to check with a number of lenders and compare their criteria and terms to determine the best option.

If you’re on an Individual Voluntary Arrangement (IVA) and looking to get car finance, here are some steps you can follow:

Check your credit score: Before applying for car finance, check your credit score to see if you’re eligible. An IVA will have a negative impact on your credit score, so you may need to take steps to improve it, such as paying bills on time and reducing credit card balances.
Shop around: Compare car finance options from different lenders, including specialist lenders that offer finance to people with IVAs.
Provide detailed information about your IVA: When applying for car finance, be transparent about your IVA and provide the lender with all the relevant information, including the terms of the IVA and your current financial situation.
Negotiate the terms: If you’re approved for car finance, negotiate the terms of the loan to ensure you’re getting the best deal possible. Consider the interest rate, the length of the loan, and the monthly repayments.
Seek advice: Discuss your car finance requirements and finance options with your Insolvency Practitioner.

For those currently in a debt solution, you will generally 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 get 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.

Keep in mind that getting car finance while on an IVA can be challenging, but it is possible. It’s important to be proactive, do your research, and compare different options to find the best solution for your needs.

Points to be aware of if you are considering entering into an IVA with car finance:

You are not guaranteed approval; 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 six years from the date your creditors agree. If your proposed term is five years, it will stay on your credit file for 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 available alternatives.
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 will be asked to downgrade the value of your next car when the current agreement ends.

By speaking with a Personal Finance Manager by applying online, you can check to see if you qualify for a debt solution using online.

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Which Debt Plans apply to you?

We assess your circumstances based on your individual circumstances and will assess for all available debt advice solutions.

Please find below a list of debt solutions we will evaluate for:

Debt Management Plan (DMP) – Information on a debt management plan
Individual Voluntary Arrangement (IVA) – Information on an IVA
Debt Relief Order (DRO) – information on a DRO
Bankruptcy – information on Bankruptcy

If you have used our online application form, we will contact you to run through your income and outgoings and discuss 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 that you can choose the debt solution tailored to you and your circumstances.

If you have an attachment of benefits and have 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.

Free and impartial money advice is available from the Money Helper, an organisation set up by the Government for people in debt.

Important Information

Debt Support Direct does not administer any debt solutions; we will assess your debts, circumstances and affordability and signpost you to an organisation or charity that can set up and help the debt plan you decide suits your circumstances.

All debt solutions should be very carefully considered. Some providers may charge fees if a solution is taken; if applicable, these will be outlined during your consultation.

Your ability to obtain further credit in the short term will likely be affected, which may also be the case over the medium to long term. Calls from mobile phones and other networks may be charged to our free phone number.

The Financial Conduct Authority regulates Ruby Holdings Limited, trading as Debt Support Direct. We can offer debt advice for both formal and informal solutions. All debt solutions must be carefully considered, and you must take independent advice.

There are sources of free debt advice and services. You can find out more by contacting the Money Helper on 0800 138 7777 or visiting moneyhelper.org.uk

Here are some links to UK debt charities that can provide help and advice on managing debt:

Please carefully read the information on these websites to understand what services they offer and if they would fit your needs. Reaching out for help as soon as you start having difficulties managing your debts is important. These organisations can help you understand your options and work with you to develop a plan to get back on track.