A Guide to IVAs and Car Finance

Whether you’re already in an IVA or considering arranging one, you may be wondering how it could affect your car finance application. Our quick guide can help.

What is an IVA?

IVA stands for Individual Voluntary Agreement. It is a legally binding arrangement between you and your creditors to pay back your debts. This means it’s recognised by the court and your lenders have to adhere to it.

It’s meant for people who can manage to pay something towards their debts, but can’t keep up with the repayment amounts their creditors are demanding.

Can I get car finance with an IVA?

A common question our customers often ask is how being in an IVA might affect their chances of buying a car on finance.

An IVA does limit your choices somewhat, is it still possible to get Car Finance. An IVA will affect your credit score. But just because you have poor credit, doesn’t mean you don’t have options. 

Whilst we can’t guarantee that we can help, our panel of lenders can assist those with a variety of credit histories – including those who are in an IVA.

How Does an IVA Work?

An IVA is set up and run by a qualified Insolvency Practitioner (IP). They will put together the repayment plan (including how much is paid each month, and for how long), and act as the go-between an individual and their creditors, to check they agree with the set monthly outlay.

As long as 75% of the creditors give the go-ahead to the IP’s proposal, the IVA will go ahead. Monthly repayments will then be given to the IP, who will split the funds between the creditors.

IVAs are available to those in England, Wales and Northern Ireland, but not in Scotland. 

If you are interested in finding out more, fill out our simple, no-obligation form today to see how much you can borrow today.

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