Car and finance package-not yet in IVA

[flowerpot]

Hi there,

I'm considering the implications of an IVA, and we have car finance arranged through the dealership we purchased it through last year. There are apprx 45mths to go on the payments.

We pay under £300 per month, but realise it would help us if we reduced this down at lot, but also we are unsure as to what effect an IVA will have on the car finance. Will it have to be included and agreed? Do we get to keep that car and keep up the repayments?

If we decide to go into the dealership to downgrade the car asap, to reduce the monthly repayments, will this affect the IVA application in any way?

I'm assuming we'll be in negative equity, as this is often the case when wanting to part exchange a fairly new car, and provided the finance package at the garage allows, this could be added to the smaller car finance? What do you think?

Alternativley, should we approach the current lender and ask them to extend the term of the exisitng finance back up to 60 months in order to reduce our monthly payment?

appreciate any help...
flowerpot

"sucsess is never final" - statement read in an interview room at MBNA!

[MelanieGiles]

Both options are possible - but is there a balloon payment on your current vehicle?

In an IVA you will carry on paying the car finance payments providing the agreement is one of hire-purchase - where the finance company retains proprietory rights over the vehicle.

Do check this carefully as some car finance is actually just provided on an unsecured basis and that loan would actually then be included in your IVA, and you would not continue to make payments directly to the creditor.