www.iva.co.uk

We started our iva 2 years ago after our clothing shop closed. My husband is a driving instructor and now needs a new car as his has 130,000 miles on it but with an iva we are unable to finance this. It is so frustrating as his business is doing well but obviously without a car he can't work. The only option we can see is to go bankrupt whcich we don' t want to do! Our iva manager has been no help and even told us that the only option was to come up with a car loan ourselves! This is not possible under terms of iva and no finance company will do that. Help!

Hi Helen and welcome to the forum

Do they not understand that your husband needs a car to work to be able to fund the iva payments?

I think it would be best to have a chat with your IP (Insolvency Practitioner) rather than your iva manager to see if they can do anything to help - maybe a payment break?

You can miss 3 payments during the duration of your iva before it would be classed as a default and your iva could fail, so maybe this could be an option.

I am not an professional, so wait for one of our forum IP's to answer your post and they will give some advice.

Goos Luck
Emma

Your husband could consider leasing a car if this is financially viable or if you have a good friend or relative who could take the HP out for you this could be an option. You can obtain credit in an IVA with the consent of the supervisor and there should be no problem with consent if the funds are to be used for your husband's business.

I actually thought part of an IVA was to agree not to obtain any further credit during an IVA, is that incorrect?

You are not supposed to take out any credit over £500 without the permission of your IP, but in certain circumstances, particularly if work is reliant upon it, then it can be agreed.

If you cannot work because of not having a reliable car, then the IVA will fail. Far better that car finance be factored in so that the creditors will still get some money back.

As Jan says it depends on the type of credit and is up to your supervisor to give consent for any application. If the credit obtained benefits the IVA and improves the chances of the IVA being completed successfully, the supervisor ought to grant consent. This seems to be the situation with your husband. If he obtains a new car not only will it allow him to continue making his IVA payments but if his business improves he may be in a position to increase his payments and improve the dividend on offer to creditors.