Could a car loan be included in my IVA?

If your car is on Hire Purchase and you enter an IVA, your unsecured lenders will normally allow the payments to continue and you keep your car. Once you reach the end of the Hire Purchase agreement and your outgoings fall, you can increase your contributions into the IVA.

However, some lenders might query very high HP payments, especially if the car isn't 'essential'. Lenders are more likely to allow it if it's essential for a job, for example. If it's a really valuable car and you could make do with a cheaper one, your lenders may not agree to an IVA until you downsize (which could free up money to put towards your IVA).

We have IVA specialists available to talk to you on the phone who can tell you more about IVA payments and what you could expect to pay on an IVA. You can request a call back from one of our IVA experts here.

A car loan on the other hand…

Most car loans are really just like any other unsecured loan that you would include in an IVA.

Any unsecured debts can be included in an Individual Voluntary Arrangement, whether that's a car loan, a payday loan, a loan that you spent on a holiday, or a credit card. All unsecured loans can be included in an IVA and your payments will be set at a level you can afford alongside other essential living costs (such as bills).

How an IVA can help

An Individual Voluntary Arrangement, or IVA, could help you to:

•  Avoid bankruptcy

•  Stay in your home

•  Write off the unsecured debt you can't afford to repay during the term of your IVA

An IVA is a commitment to repay as much as you can for five years. However, your monthly payments will leave you with enough for your everyday living costs, so you shouldn't fall behind on anything important.

As part of an IVA, homeowners may be required to release some of the equity in their home. Although this effectively reduces the amount they would have to put down as a deposit when remortgaging in the future, it does mean they will be able to stay in their home - unlike bankruptcy, which often forces homeowners to sell their home.

An IVA can only go ahead if the lenders responsible for 75% of your total unsecured debt agree to it.

If you're not sure about any of this, speak to one of our debt advisers. They will be able to tell you whether an IVA could help you and whether it's likely that your lenders would accept it.

You need an Insolvency Professional to arrange an Individual Voluntary Arrangement for you. We can arrange your IVA proposal and one of our trained Insolvency Practitioners can oversee the entire process for you.

Remember that like most debt solutions, an IVA will affect your credit rating, with records appearing on your credit history for six years.

Click here to find out how Freeman Jones can help you to deal with your debt problems.

By Lucy Bower.

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Subject to eligibility and acceptance. Fees Payable. Debt write off applies to unsecured debts only and on completion of an IVA, alternative solutions may be offered. If your IVA fails, it could lead to Bankruptcy. Your ability to obtain credit will be affected for at least 6 years. Homeowners may be required to release the equity in their property.