If you have decided that entering into an IVA - Individual Voluntary Arrangement -  is going to be the best thing for your current financial situation, you may be wondering whether or not you are going to be able to keep your vehicle. 

If you enter into an IVA you will typically be allowed to keep your car so long as it is necessary for family or work transport reasons and the value of the vehicle is not excessive. 

Even if you obtained your vehicle as part of a Hire Purchase (HP) agreement and you are still paying it, you will typically be allowed to keep it. However, this is again so long as the value is not deemed excessive and the monthly HP payments are reasonable. 

What is deemed excessive value?

Typically, a vehicle up to the value of £6,000 is not going to be a concern to your creditors when they are assessing your IVA proposal. However, if you have a vehicle that exceeds this value, it may cause your creditors to ask why it is necessary for you to have a vehicle of such a high value. They may enquire as to why you cannot sell the car and buy a cheaper and more modest vehicle instead. 

Nevertheless, in some instances, it would not be thought of as unreasonable for your creditors to enable you to keep a car that is worth as much as £10,000 in value. It really is going to depend on your individual circumstances that surround the IVA proposal. 

Holding onto a more expensive car while entering an IVA

There are some cases whereby it is going to be possible for you to hold onto a vehicle that is of a higher value while entering an IVA. for example, an IVA can last five years and sometimes even a little bit longer, and so it is imperative that your vehicle is of sufficient quality so that it lasts for this period of time. 

If you were to have a cheaper vehicle, it may not last for as long, and so the IVA proposal would have to enable you to organise some kind of replacement vehicle throughout this period of time. Therefore, if you have a car that is of a bit higher value, to begin with, this could increase the chances of your IVA running the complete course, which is obviously important for your creditors. 

Aside from this, another argument that you could make is that public transport may not be suitable for you in terms of getting to and from work, as well as failing to meet the transport needs of those who depend on you, for example, your children, spouse, or even an elderly parent that lives with you. 

You also need to consider the location in terms of the public transport that is available for you. For example, if you live in London, you will have much more public transport available to you when compared with other locations around the UK.

Aside from this, you also need to factor in your work hours. For example, public transport may not be a very good option for someone who works variable-length shifts or unsocial hours. These are reasonable grounds for holding onto a higher quality vehicle, and so you will certainly be able to make a case for holding onto your car if it is worth more than £6,000. 

This is not the only example of why you may need a higher value vehicle. If you are self-employed, you may require a higher value vehicle to keep working in your industry. For instance, if you are a courier driver or a taxi driver, the sort of vehicle that you drive makes a difference. You may be able to make a solid case for holding onto your vehicle because of the sophisticated look of it. 

Last but not least, it is imperative to make sure that any vehicle you own and drive is safe and roadworthy. Therefore, you should not be forced into trading down to a car whereby your health and safety may be compromised. 

If you have any further queries about taking out an IVA, please do not hesitate to get in touch with us.