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Topic starter
19/09/2012 9:26 pm
I run my own business for which a reliable medium sized van is imperative. My current van is beginning to show its age mechanically and milage is high and I really need to replace it within the next few years. I have a fair amount of outstanding debt the majority of which is being paid back at a reduced level, on payment agreements with interest frozen also. I have always kept up to date with these payments for the last 4 years or so but realistically it will take 30 years to clear my debts !
I am considering a Trust Deed at some stage in the next few years to finally rid me of this accumulated debt but as I also need to renew my van I am in a quandry as to how to finance this purchase, assuming I will proceed with an accepted TD !
My options are as follows :
1. Save the money over next few years and purchase a second hand van
2. Try and finance a used or nearly new van on Hire Purchase.
I want to own the van at the end of the day but also want to be able to realistically look at a TD also. It may be that I dont have any chance of obtaining agreement to an HP arrangement anyway but I would like to know my options prior to applying for this.
Finally my question : How would an existing or future HP agreement affect my TD application and I assume I could not apply for HP whilst in a TD arrangement ?
Any advice welcomed. Thanks.
(And yes getting into more debt is not a good idea but when its a business asset that drives my income it may be a neccesary evil!)
19/09/2012 9:42 pm
Hello Buz.
I'm assuming you're a sole trader?
You could apply for HP for a van. If you get it you'd normally carry on the HP payments during your trust deed.
You should be aware that HP contracts may include a termination clause if you become insolvent. Most firms wouldn't use it, but there are a couple that do.
A HP arrangement will also reduce your disposable income which in some circumstances could affect your eligibility for a trust deed.
Buying a van above a certain value may create an asset that has to be dealt with during a trust deed.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
Topic starter
19/09/2012 9:59 pm
Thanks TDA, yes I am sole trader. Tax benefits of buying the van through HP are attractive also (100% relief up front) and also interest part of repayments are tax deductable so i would need to examine the costs and benefits in detail. Value of new van would probably be up to £10,000. I note yor commenst though and they are useful thanks. I expect a knock back anyway so will call a dealer tomorrow and see what hoops I need to jump through first !!
