Can I change cars in an IVA?
Yes you can. Your IVA does not prohibit you from changing your car.
Creditors recognise the importance of maintaining a serviceable vehicle and understand that most people would be lost without their car.
If you have the means to replace your car without any impact on your ability to maintain your IVA contributions, then there shouldn't be any problems in making the change.
Communication Is Key
However, if you're going to struggle to make the change without some interruption to your IVA payments, then you should seek advice from your IP.
Whenever you have issues relating to the practical aspects of your IVA you should contact your IP for their advice.
They are the ones with the ability to offer help and advice, whilst holding the necessary authority to make changes to your IVA payments.
The sooner you include them in the process, the sooner you will reach a resolution to the problem you are experiencing.
Available options
If your car suffers a catastrophic breakdown whilst you're in an IVA, you're going to need to replace it and the problems you're going to experience will relate to the practical aspect of purchasing a replacement car whilst in an IVA.
Here are a few of the different scenarios that you may face, along with a few ways you might have to remedy the problem.
Purchase a runaround
Since the introduction of the IVA protocol, it is now possible to request a payment break from your IVA.
With permission from your IP, you could divert your IVA payments into the cost of a new vehicle.
Of course, this solution doesn't provide you with a lump sum, but it might provide you with an opportunity to repay a temporary loan to a family member or friend, assuming they'd been able to help purchase a runaround.
If you believe this option would help you, you should seek the approval of your IP, as they alone have the discretion to grant the break.
Replace an HP agreement
If you need to change you car whilst you're still in the process of buying it through a Hire Purchase agreement, you'll have to deal with some other potential issues.
Firstly, changing your credit agreement will be made much more difficult now your credit rating has been damaged by your IVA.
Furthermore, in today's economic climate, someone in an IVA will really struggle to find a lender prepared to offer 'secured' finance, even with the consent of their IP.
Secondly, under the terms of your IVA proposal, you'll probably be committed to increasing your IVA payments when your current HP agreement comes to an end.
If, instead, you now want to renew and extend the finance agreement, you'll need to seek the approval of your IP.
Refresh an HP agreement
It maybe simply a matter of exchanging your vehicle for a newer one, using your existing HP company to provide the finance.
If your new finance agreement is of a similar size monthly payment and of a similar term to the original, it should be OK.
Your IP will, however, want you to refrain from increasing the size of your HP contributions, as doing so might impact your ability to afford your IVA payments.
So, again, seek the approval of your IP.
Calling a 'Variation Meeting'
If the changes necessary to keep your IVA on track are beyond the supervisor's discretion, a Variation Meeting can be called.
Calling a Variation Meeting provides creditors with the opportunity to vote on whether to approve a variation to the original agreement.
As with the original Creditors' Meeting, the proposal to make the variation is put to a vote. If the necessary majority vote to accept the variation, then it becomes legally binding on all creditors, and even those that voted to reject are bound.
The outcome to a Variation Meeting is never guaranteed so, again, it's important to discuss the different outcomes with your IP before you take action.
