Can PPI offer settle debt that already has charge on property?

dracodream

I have a big debt with a the bank in question. The bank via court order placed a charge on my property to pay off the debt when the house is eventually sold.
The bank has now offered me big PPI refund but said it will be used to lower the debt.
I realise they can use PPI money to settle the debt but can they do this even though they already have a charge on my property?
Can they also hold onto the 8% interest included in the figure?

There must be many people in the same position as me.

dunstonh

I realise they can use PPI money to settle the debt but can they do this even though they already have a charge on my property?

Yes.

The fact it is secured doesnt change anything. If you have arrears, defaults or amounts written off then the bank can use the redress against those rather than pay it to you.

Can they also hold onto the 8% interest included in the figure?

Some do. Some don't. No hard and fast rule on that one.

There must be many people in the same position as me.

There are. It's a bit of an FAQ in here. And the response is they can use the money against the debt if the debt went bad. They cant if the debt is within the original terms of the agreement and not in arrears, default or had amounts written off.

dracodream

dunstonh wrote: »

Yes.

The fact it is secured doesnt change anything. If you have arrears, defaults or amounts written off then the bank can use the redress against those rather than pay it to you.
Some do. Some don't. No hard and fast rule on that one.
There are. It's a bit of an FAQ in here. And the response is they can use the money against the debt if the debt went bad. They cant if the debt is within the original terms of the agreement and not in arrears, default or had amounts written off.

Thanks dunstonh for your answers to my questions. You confirmed what I thought would be the answers but at least I can continue to the next step knowing I did check it out before I signed the acceptance letter.