PPI Repayment and IVA's

nickjohn

My wife and I entered into a joint IVA nearly 2 years ago and all is going well. Recently we chased LLoyds on 2 PPI claims. 1 is for a loan paid off the other had a handful of payments left when the IVA kicked in.
We have just been notified that we are getting substantial repayments against the PPI's one will come direct to ourselves as the loan is paid off (I realise the implications with our IVA repayments etc and I have been told it must be detailed within the annual review etc and some or all must be paid over to the IVA practitioner) but the bank say the other must go direct to the IVA practitioner to clear off the balance of the unfinished loan.
I just wanted to check if they can do this as I was told at the start one creditor could not be paid off as it would be seen as preferential and could be a breach of the IVA agreement.
Ultimately anything which gets the IVA sorted early is fine by me but I don't want anything to upset things after they have been going so well.

fermi

If I remember correctly then a creditor can "set off" any PPI payment against debts owed to them, even though they are included in the IVA and it may on the surface look to be a bit unfair to the rest.

I thought they did that without sending the money first to the IP, but could be wrong.

Obvious thing is to have a word with your IP/supervisor ASAP.

FoggyBrain_2

As Fermi says, it usually offsets that particular creditors loan, however the other creditors do benefit in the long run, as that amount, which has been reduced from the creditor in questions claim, will be distributed amongst the remaining creditors by way of a slightly increased dividend.

balmk

From experience I would suggest discussing this with your IP now rather than wait until your review.

Congratulations on your PPI successes though!