Hi silverfish.

I guess the options are:

1 - Get some help, possibly from family (buying or borrowing).
2 - Buy a very cheap car.
3 - Try to get finance.

It might be possible to get finance. When we looked into it recently it would be at a relatively high rate of interest and would require the consent of the trustee. You can read a bit more about this option at:

(Link removed 2020).

Our view is that the expensive finance route is probably the last resort for most people, though might be appropriate for some.

Hi Silverfish

I think finance will be difficult if you are in the trust deed, but there is not legal restriction on you obtaining credit unlike sequestration.

Mark

Can you explain to be briefly that is the difference between obtaining a trust deed and sequestration? In what circumstances would sequestration be used? Thanks

Hi silverfish.

They're both types of personal insolvency and are in many ways similar.

One big difference is that in sequestration you will not necessarily have to contribute towards the debts (from income and/or assets) though you will be required to do so if you can afford to.

For a trust deed to be accepted by creditors you have to offer something to them in return (such as contributions from income and/or realising the value of assets). Some people aren't in a position to do this, in which case sequestration might be their only real option.

In sequestration you cannot borrow more. Being in a trust deed doesn't have the same rule. Of course that doesn't mean that it would necessarily be sensible to borrow during a trust deed; in some circumstances it could be disastrous.

Hi has anyone who is in or has had a TD been successful in getting car finance from a well known dealer ship (I'm not sure if I'm allowed to mention the name on here) so lets say (A C)?

Once I'm discharged and have my form 5. I might approach A.C with my form 5 explaining my past to see if there is anything they could do, no harm in trying I guess.

Hi there, my first concern on obtaining a new vehicle during the trust deed would be how the monthly payments would be met? Would this jeopardise monthly contributions to the trust deed? Do you already have a car on HP and are simply looking for a new vehicle? I think it would be difficult for the trustee to agree to this unless someone else was paying for it. Similarly I think it may be difficult to obtain this type of credit, durin the trust deed

I think the type of circumstance where a trustee might agree to this could be:

1 - A car is required to work and therefore to generate income.

2 - There was already a car payment (which has ended) and the new payment replaces it or/

3 - The trust deed will fail if a new car cannot be sourced, but the trust deed will remain viable and in the best interests of creditors even with the new car payment added.

The company mentioned in my previous link is open to providing finance on vehicles to people that are in an IVA or trust deed. It isn't cheap though, and the consent of the insolvency practitioner to the new payment is required by them.

If your willing to hunt about a bit there can be allot of car bought for not allot of money these days. This way a few months of not paying your TD to use the money for the car (only do this with the agreement of your practitioner.....!) means you can get back on the road with minimum impact to your TD and personal circumstances. Buying from a dealer even at the low end of the market value gives you allot of protection should anything go wrong etc also. For £1000 you can get Corsa's, Micra's, Mondeos, Astra's with around 60K to 80k on the clock and (if serviced and maintained which is typically cheap and easy to do on these car types) will last you for years...!

Getting a car loan / HP in a TD will almost certainly involve you paying crippling interest. It can be done but the amount you will pay will make you and your practitioners eye water! I am also not sure what it would mean for equity in the car due to the value it holds. One for the experts to answer.

Leasing a car is also another option although it may be just as hard to do as getting HP. This is an area I don't know much about but might be worth perusing.

Hi Sparky1,

I finished my TD in 2009 and in 2011 I needed a new car. I was unable to obtain a loan or get any funding for a used car. However I approached Ford (figured I didn't have anything to lose) it was McCrae and Dick and I opted to try for a new car on HP as the loan is secured to the car. My application went off (I explained my circumstances to the sales man who really didn't know all that much about it but was helpful and friendly) and it was referred to the underwriters. Within in 24 hours I had a phonecall to say it had gone through all ok. At the time I was not a homeowner and was in private rented accommodation. The TD was still on my file and all my debts showed as satisfied. I was on the elctoral role and had recent positive credit entries from mobile phone contract, bank account, credit card and catalogue. I spent the year after my TD building positive entries before applying for a car. I also managed to get a mortgage with a 25% deposit via my current account provider whilst my TD was still on my file, again referred to underwriters and waited a week to get this approved. I would say before approaching my current account provider I had used a mortgage broker and although I had an agreement in principal from two high street bank lenders ultimately the applications were unsuccessful, it was 6 months before I decided to try again and just go through my own current account provider. Hope this helps.

Thanks for that info blacklily and I'm glad it all worked out well for you.

Thanks Sparky1 - there is light at the end of the tunnel.