Car Finance Claim If You Are in an IVA or Have Been Bankrupt
Scheme status (updated 5 August 2026): parts of the FCA motor finance redress scheme are temporarily suspended while the Upper Tribunal considers legal challenges. Lenders do not currently have to calculate or pay compensation under the scheme, the original decision and payment dates no longer apply, and no payment under the scheme is guaranteed. If the scheme proceeds, first payments are expected in 2027 at the earliest. Any dates mentioned below were set before the suspension.
If you are in an IVA, have been made bankrupt, or are in any other formal insolvency proceedings, you may still be eligible to make a car finance claim under the FCA’s PS26/3 redress scheme. However, there are important rules you must follow — and getting them wrong could have serious consequences for your insolvency arrangement. This guide explains exactly what to do.
In this guide
- Can You Still Claim Car Finance Compensation in an IVA?
- What Happens to the Compensation in an IVA?
- What Happens to the Compensation in Bankruptcy?
- The IVA, Bankruptcy and Commuting Rule
- What If Your Car Was Repossessed During an IVA?
- How to Proceed
- Frequently Asked Questions
- Related Guides
- Our Partner's Fees Explained
- Think You May Have a Motor Finance Claim?
Can You Still Claim Car Finance Compensation in an IVA?
Yes. Being in an Individual Voluntary Arrangement (IVA) does not disqualify you from making a car finance claim under the FCA’s redress scheme. If your PCP or HP agreement was between 6 April 2007 and 1 November 2024, and it included an undisclosed commission, you remain eligible.
However, the FCA is explicit on one point: you must tell your lender that you are in an IVA, and you must also tell your insolvency practitioner. This is not optional — failing to do so could breach the terms of your IVA and have serious legal consequences.
What Happens to the Compensation in an IVA?
In an IVA, you have a legally binding agreement with your creditors to repay debts over a set period at an agreed amount. Any unexpected windfalls — including car finance compensation — may be classified as an asset of your IVA estate.
Your insolvency practitioner (IP) must be informed about any potential compensation. Your IP will then advise on whether:
- The compensation forms part of the IVA estate and goes to creditors
- You are permitted to retain some or all of it as an excluded asset
- The IP needs to formally vary the IVA to account for the new asset
The outcome will depend on your individual IVA terms and the value of the compensation. Some IVAs have a clause that permits windfall income below a certain threshold to be retained by the debtor.
Do not accept car finance compensation payments without telling your insolvency practitioner first. Receiving and keeping money that should form part of your IVA estate without declaring it could constitute a breach of your IVA and potentially be treated as fraud.
What Happens to the Compensation in Bankruptcy?
If you have been made bankrupt, the rules are similar but the relevant authority is the Official Receiver rather than an insolvency practitioner.
The FCA is explicit: if you are in bankruptcy proceedings, you must tell both your lender and your Official Receiver. Any compensation may form part of your bankruptcy estate and be used to pay creditors.
However, if you have already been discharged from bankruptcy (which typically happens after 12 months), compensation for a mis-sold finance agreement taken out before bankruptcy is generally yours to keep — provided the agreement itself was not surrendered as part of the bankruptcy proceedings. Take independent legal advice if you are unsure.
The IVA, Bankruptcy and Commuting Rule
A common question is whether a vehicle used for commuting to work falls within the FCA scheme. The answer is yes — commuting counts as personal use under the scheme rules. A vehicle used partly for work and partly for personal journeys (including commuting) remains within scope, provided the agreement was in your personal name and not in a company name.
What If Your Car Was Repossessed During an IVA?
If the car financed under your PCP or HP agreement was repossessed during an IVA, you can still make a claim for the historic commission mis-selling on that agreement. The repossession of the vehicle does not affect your right to claim for how the finance was sold to you at the outset.
How to Proceed
Step 1 — Confirm eligibility
Check whether your original PCP or HP agreement falls within the FCA scheme dates (6 April 2007 to 1 November 2024) and was arranged through a dealer for personal use.
Step 2 — Tell your insolvency practitioner or Official Receiver
Inform them you are considering making a car finance complaint and ask for their guidance on how any compensation should be handled under your arrangement.
Step 3 — Complain to your lender
Submit your complaint, noting your IVA or bankruptcy status so the lender can direct communication appropriately.
Step 4 — Accept the outcome via your IP
Any compensation offer should be handled in accordance with your IP’s or Official Receiver’s instructions before you accept or decline.
Frequently Asked Questions
I completed my IVA several years ago. Can I still claim?
Yes. Completing an IVA does not affect your eligibility for a car finance claim. As a completed IVA no longer has an active insolvency practitioner managing your affairs, compensation you receive is generally yours to keep. Check with a debt advisor if you are unsure about your specific IVA completion terms.
My bankruptcy was discharged two years ago. Can I claim?
Yes. Once discharged from bankruptcy you are no longer under the Official Receiver’s control for most purposes. Compensation for a mis-sold finance agreement is generally yours — provided the agreement itself was not part of the bankruptcy estate. Take advice if unsure.
Will making a car finance claim affect my IVA?
Submitting a complaint does not itself affect your IVA. What may affect your IVA is receiving a significant payment without informing your IP. Always tell your IP before accepting any compensation payment.
Can a CMC make a claim on my behalf if I am in an IVA?
Yes — a CMC can submit a complaint on your behalf regardless of your IVA status. However, any compensation they secure will be subject to your IVA terms. Your IP must still be informed and any fee paid to the CMC would be deducted from the gross compensation before it reaches your IVA estate.
Related Guides
FCA Car Finance Redress Scheme Explained
Car Finance Claims Without Paperwork
Car Finance Claim — Self Employed
Back to Car Finance Claims Hub
You will be redirected to our partner’s website to complete your claim.
Think You May Have a Motor Finance Claim?
The FCA estimates average compensation of around £830 per eligible agreement, but eligibility and payment amounts vary. Some customers may receive nothing. Complaints about agreements started from 1 April 2014 should be submitted by 30 June 2026 to be considered under the earlier timetable. Different dates apply to older agreements. The scheme is currently subject to legal challenge, so dates and payment timings may change.
