www.iva.co.uk

hi all , im in iva for year and half .i got car fon finance just 2 months before i got iva.i had car accident which is not my fault and car is going to be writtin off.car got value £3400 pounds and car finance send me letter to pay £8854 pounds which i dont know how to pay all that money when im already strugling and im with out a car relying on taxi and buses.any help plz

Hi Ben and welcome to the forum

Is this your only debt or do you have others? Is the loss not covered by your car insurance policy?

It sounds to me like the insurance has offered the value of £3400 as the current market value of the car, but the amount left outstanding on the finance agreement is still a further £8854, is this a fairly new car Ben?, this is why Gap insurance is so important for newish cars when you take them on finance.

Firstly, you need to ensure that what your insurer is offering is fair market value for the car, have a look at Glass's valuations, most insurers offer a nominal sum to start with but with negotiation will increase this.

As for the remaining debt, does anyone know if this could be included in the IVA at all?

thnx Melanie and lem, insurance not paying extra money .after iva its mine only debt .car value jsut about right and i already paid about £ 4000 to finance by my monthly payments, so i dont know why i still need to pay over 8 grand they lend me £ 7000 when i took finance.is there any chance that the money can go into iva? any help

An IVA is not a suitable option for you Ben with only one relatively small debt - you would be much better firstly getting the HP company to send you a detailed statement showing you how the balance is made up, and then coming to some arrangement with them to make an affordable ongoing payment towards the debt. If you have no assets that would be at risk from bankruptcy proceedings, this is also an option - but possibly a little extreme again given the relatively low amount that you owe.

thnx Melanie, im already in iva .just wondring if this debt can be add on to my iva.i cant pay £ 5000 when im already paying iva monthly installments which leave nothing for me any extra money.

Hi Ben,

Speak to your IP and tell them what has happened - you might be able to get it included but they are the best ones to advise.

Hi Ben. The supervisor of your IVA will be able to advise you on this one. Usually when additional creditors emerge they can be included in the IVA.

thnx everybody for help and advice...

I hope your IP will be able to help you on this - let us know how you get on. The APR must have been set very high on your agreement if you have already paid the £4000 and they want another £8500 on a original loan of £7000......hopefully the difference can be added to your IVA but it may mean additional payments at the end possibly.

Speak to your IP and gain advice that is suitable to your own situation.

I've assumed that the car loan was taken over a 5 year period?

If so, i've calculated a flat rate of 15% so an APR of about 30%. Which indicates one of two things; a) you had payment protection included within your payments, or b) you were screwed on the rate.

If you still have it, take a look at your finance agreement paperwork, see if it says if its a HIRE PURCHASE agreement or a PERSONAL LOAN agreement. (A hire purchase agreement will make mention of your rights re having the car repossesed or your right to terminate the agreement). If its a personal loan agreement, theoretically you could simply continue to make the monthly payments and use the lump sum from your insurance to buy a cheap second hand car.

Unfortunatelty if its a hire purchase agreement, you are legally bound to repay the outstanding debt immediately, as it isn't possible to owe a debt against goods which no longer exist (as the car will be written off).

I presume you don't have GAP insurance?

Sorry if this doesn't help. I've been in car sales for over 11 years and it always infuriates me to see that someone has had theor trousers taken down with the interest rate.

thanks for working it out dragonkeeper - let's hope he can get this sorted in his favour.

thnx luluj nd dragonkeeper for help,didnt spoke to IP yet.i going to call on wednsday as im bussy,i will let you guys know whats happen

thnx for advice and help