The simple answer to this question could in fact be yes, there isn’t anything in the Insolvency Act that prohibits this, there are however several areas of consideration that may mean that this is not possible to achieve.

There is a section within the IVA proposal that references further credit facilities. It generally states that you must not take any further credit which is greater than £500 (with an exception being made for utilities) without written approval by the Supervisor of the IVA. The Supervisor would look at the reasons why the vehicle is required to see if they are justified, and to ensure that this is not going to be to the detriment of the creditors who are being paid by the IVA. Perhaps a HP agreement is needed as part of a promotion or a new job, the vehicle being required in order to achieve the higher salary, which may mean that the creditors receive more of the money back that they are owed. So they are not likely to complain.

Another consideration would be lenders attitudes. It may be difficult, although not impossible, to find a company willing to provide the finance for the HP agreement.

This question was answered by Debt Advice Foundation, an independent UK debt advice charity. If you're considering entering into an IVA, Debt Advice Foundation provides a free, confidential helpline and can advise you on whether you qualify. Click here to find out more.