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Can I use an insurance payout to buy a new car when in an IVA? |
Submitted on: 27th Apr 2009 by Non-Member | Total Answers: 1
Hi, I have an iva and am about to receive an insurance payout for a injury i received. My car is on its last legs and about to pack up, its old 120 thousand miles on the clock etc etc!! I have told the iva people about the windfall and also the fact that i need a more reliable car for work. I asked if i could use a small amount of money to buy a better car to last the Iva period. They say that once they have the money I can put in a 'claim' to justify the use of the money on a 'new' car. Im worried they will take the money and then just say no and leave me with a car thats on its last legs. Can anyone give me some advise on this? Should I hold the money until they tell me how much i can use on a car? I have been totally honest with them but if they take all the money and dont let me get the car whats the incentive of going to court to get my payout?? Can you help??
Re: Can I use an insurance payout to buy a new car when in ...
Any windfall you receive during the IVA should be paid into the arrangement. Bad news.
However... An insurance payout is a windfall but there is a twist since it usually broken down into different parts; loss of earnings, and injury/stress/illness etc You need to discuss with your IP how each element is treated.
Most IVAs state that any windfall over £500 or £1000 or some such figure should be paid into the IVA so I certainly think you should be able to keep that portion, then negotiate with your IP according to how much you need to replace your car.
IVAs have to be realistic and sustainable so I believe you should be ok to replace your car but you must co operate with your IP. Sorry I can't give a firmer opinion. If you have any other questions on IVA proposals click on my name and email me at Debt Advice Foundation.
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