In recent years, more and more people have been turning to Individual Voluntary Arrangements (IVAs) to help them resolve their debt problems. There are many advantages to an IVA, but one of the questions we often get asked is whether you can get IVA car finance or not?
The good news is yes – you can, but there are some key things you need to know about getting IVA car finance so that you can make an informed decision about this when it comes to your situation.
Overview of an Individual Voluntary Arrangement
An Individual Voluntary Arrangement, or IVA as it is commonly referred to, is a formal agreement between you and your creditors to pay back what you owe. The key elements of an IVA are: making regular payments over a fixed period; extending credit limits; stopping further borrowing; agreeing not to transfer assets without permission; continuing with legal action if necessary.
Are you eligible for IVA car finance?
The short answer is yes. If you can meet certain eligibility requirements, you should be able to apply for an IVA. What is an IVA? Well, in simple terms, it’s a legally binding agreement between you and your creditors. It requires that you agree to pay back a portion of what you owe on your debts over a fixed period of time — usually 5 years or more. Your creditors will stop taking steps towards collections against you for at least 6 months while they look into your proposal.
The process of applying for IVA Car Finance
If you’re currently in an IVA, you’ll almost certainly need permission from the Insolvency Practitioner (IP) handling your case to get credit worth more than £500– thus, you’ll definitely need it if you want to get auto finance.
If you don’t seek your Insolvency Practitioner’s authorization before getting car financing, you could end up paying a lot of money. As a result, you will be in violation of the conditions of your Individual Voluntary Agreement, and it may collapse.
Based on your financial circumstances, your Insolvency Practitioner will determine whether or not your auto finance request is reasonable – particularly, whether covering the complete amount due is within your budget, considering your income and expenditure. If agreeing to a car finance loan meets your financial demands, your Insolvency Practitioner is likely to approve it.
What happens during the approval process?
After completing your application, a credit expert will review it and you’ll be contacted shortly after. Once you’ve been approved, it’s time to start thinking about what car you want to purchase. However, applying for an IVA doesn’t mean that your bank account is filled with money just waiting to be spent.
For most applicants, it means they should carefully choose a car they can afford while remaining within their monthly budget. It also means dealing with any new debts responsibly so as not to slip back into old habits once their agreement is complete. Always consider how you’ll afford extra costs such as fuel and insurance before deciding on a vehicle.
If you want more information about IVA and car finance, you can find it on Monemyst.
