IVAs and Payment Protection Insurance (PPI)
PPI mis-selling claims relate to Payment Protection Insurance that a Creditor may have mis-sold you whilst you had an agreement with them.
You may not have known you were paying this insurance within your agreement, which is why it could have been mis-sold to you. If you didn’t agree to this insurance, you have the right to claim this money back.
Is PPI compensation considered a windfall in an IVA?
No, PPI compensation is not considered a windfall. In most IVA proposals, it’s actually classed as an asset and this is why the full amount has to be paid into your IVA arrangement.
What if the PPI claim is for a debt that isn’t in my IVA?
Whether the debt was included in your IVA arrangement or not, it’s still classed as an asset. If your IVA is still in place, every PPI compensation pay out must always be paid in full into it.
Can PPI compensation be claimed without my consent?
No, but if your Insolvency Practitioner thinks you were mis-sold PPI they can ask that this is checked and have the compensation paid directly into the arrangement.
Please bear in mind that if you don’t help with their requests for PPI compensation, this could potentially delay the completion of your IVA.
What if my IVA has been completed?
It is important to check your IVA proposal and terms and conditions. PPI compensation may have to be paid into your arrangement even if it is completed – if the PPI is for a debt that was prior to your IVA starting.
This may seem unfair if you’ve received a completion certificate. However, the IVA proposals may still give your Supervisor the right to collect and distribute assets included in your IVA, even though your IVA is completed.
What should I do if I think I’ve been mis-sold PPI and I am in an IVA?
First, let your Insolvency Practitioner know, if you think you’re entitled to PPI compensation. You will then need to make the claim for it.
You can do this yourself, and all the compensation received will be paid to your IVA.
If you don’t want to claim PPI compensation yourself, you could ask a Claims Management Company.
If you decide to use a claims service, you will need to check that any fees for their services are taken from the PPI compensation. This means you will not have to find the money to pay them, which could cause further debt problems.
We know that receiving this money to spend for everyday expenses may be preferred, but if it is a big enough pay out it could really benefit your IVA and in some cases even reduce the length of the arrangement!
IVAs and PPIs can feel complicated, but as long as you disclose all the potential PPI compensation you know of to your Insolvency Practitioner there should be no issues. Talk to the team at PayPlan today for free debt advice.
*In the case of a one-off lump sum settlement