Keeping some of a PPI Claim

FiatFan_2

Hi all,

I have a bit of a bee in my bonnet about this at the minute and just wanted your opinions whilst I consider whether to raise the issue again with my IP or just let it go.

After a meeting with my ex bank manager regarding an unrelated matter he put in motion the account details to reclaim the PPI on the know mis-sold PPI on two old loans. The judgement was made they were mis-sold and including the interest a whooping £12k has been awarded :eek:

Now, having just received the SC moneyaware email, the last item related to PPI claims. This is what was said, "Yes, you can reclaim any mis-sold payment protection insurance (PPI) but any monies received from a PPI claim would be due back into your IVA for the benefit of creditors.

In the result of a successful PPI claim we may allow you to keep some money if you provide evidence why this is needed. Contact your Supervisory caseworker for more details."

In setting up my/our IVA we did agree to pay over all PPI claimed or windfalls etc. I haven't an issue with that at all, it's good that the creditors will receive more than originally agreed.

However we currently have circa £5k outstanding in car finance which is excluded from the IVA and will be paid off in 18 months and our payments will increase as agreed. When we advised our IP that this money has been awarded we put forward a proposal to pay off the car finance early and the PPI money would be repaid in 18 months instead of the car. They have refused our request stating that under no circumstances would any PPI money be released back to a client regardless of purpose or means of repaying it. Which to me means their quote above is very misleading.

So what's your opinions/experience, try again or just leave it be?

Thanks

UpToMyNeckInIt

Hi FiatFan,

Are you dealing with your IP, or still negotiating with your case-worker?

I suggest writing directly to your IP.

Sadly however, the consensus opinion regarding PPI refunds is that they do usually have to be paid over.

FiatFan_2

I emailed them in the first instance to send them a copy of the letter I received and got a very short, non descriptive response saying no and to contact them if you wanted further clarification. So I rang them and spoke to the supervisor at Jacqueline Westerman who had responded.

Whilst I understood and in many respects agree with what he said, again I feel they have given misinformation about things. They did say that if I was unhappy about the decision I could lodge a formal complaint, but don't see any benefit in that.

We'd just hoped that we could have the finance paid off so we could trade the car for one that was more economical and appropriate to our needs, just have to wait till the finance is paid off.

UpToMyNeckInIt

Yeah, I see your line of thinking.

The only reasons I could think of for your IP taking this stance is that a car is an ever-depreciating asset, and / or you could insure it 3rd party only, and subsequently total it!!! This in turn could adversely affect or endanger creditor return etc. further down the line.

FiatFan_2

haha yes, they know fine well we're eager to get rid of it. It was agreed pre-iva that we could then that was kiboshed once it was accepted. It's still worth a fair bit the now, but will have plummeted in 18mths time. As he says, it's budgeted for so we shouldn't have an issue paying for it.

Max_Maxwell

Push hard to retain some of this money. £5k might be a bit steep but you could use the standard windfall rule as a basis for negotiation. Under the standard windfall rule you can keep 10% and split the remainder 50/50. In this scenario you could suggest you keep 20% and they can have the rest.

OK, may not get 20%, might get only 10% but I see no reason not to negotiate hard. The stock response from any IP is going to be 'no' to keeping any of it because for all additional revenue they generate for the creditors, the bigger the kickback they get. They're not doing it for any other reason.

Everything in life is negotiable. State your case and give a compelling reason for needing £1,200. I'm sure you can come up with something.

FiatFan_2

I believe anything greater than £500 goes straight to the pot regardless of the 10/50/50 rule.

I wasn't expecting anywhere near £12k so will be speaking to them again about it as I do think there is more to be negotiated hence I thought ad post it on here to find out others opinions.

Anondebtadvisor

Most PPI reclaim is an asset not a windfall and does not come under the 10/50/50 rule.

So check your IVA proposal under assets, if you find a clause like this below (Known as an all assets clasue) then PPI will be classed as an asset and paid into the IVA

‘Property other than Excluded Assets belonging to or vested in the Debtor at the date of commencement of the Arrangement which would form part of the Debtor’s estate in a bankruptcy shall be subject to the Arrangement and be an asset thereof.’

UpToMyNeckInIt

Anondebtadvisor wrote: »

Most PPI reclaim is an asset not a windfall and does not come under the 10/50/50 rule.

So check your IVA proposal under assets, if you find a clause like this below (Known as an all assets clasue) then PPI will be classed as an asset and paid into the IVA

‘Property other than Excluded Assets belonging to or vested in the Debtor at the date of commencement of the Arrangement which would form part of the Debtor’s estate in a bankruptcy shall be subject to the Arrangement and be an asset thereof.’

I too have heard representatives from several IVA firms state that PPI is an (undisclosed) 'asset' as opposed to a 'windfall'.

Does that mean that if your IVA lacks the above-mentioned clause, then the PPI is (by definition of it not being a 'windfall'), yours to keep?

FiatFan_2

yeah in the latest email the IP quoted this from my agreement,

"Refund of mis-sold Payment Protection Insurance (PPI) - Section 17(6) of the standard conditions will not apply in relation to monies due to me from refunds of mis-sold payment protection insurance policies. Creditors are not to apply set off against debts bound by the terms of the arrangement. Any such refunds will be classed as an after acquired asset in accordance with Section 14 (1) and fall due to the arrangement for the benefit of all creditors."

From what I understand now, to be able to claim from any PPI/inheritance etc you have to exclude it from the arrangement at the outset otherwise the IP will claim it regardless of your circumstances. I expect trying to exclude a payment will cause all sorts of problems at the outset.

RuthnJasper

I've been through this. I'm in my last year of an IVA and, based on advice and help from the MSE site advice and forum support, I pursued the PPI claim myself rather than using the shysters recommended by my IPA. My claim was (after a lot of hassle) successful and was, rightly, credited to my IVA.

HOWEVER, I argued that the claims company recommended by the IPA had stated that their fee was "up to 40% of the refund and any compensation awarded". I put this to them and said that my pursuing the claim myself had resulted in no "percentage fees" and an 100% refund. Therefore, in view of my own time and hassle involved in making the claim personally (and it WAS hassle - it was an old loan with HSBC and they c*cked-up royally at EVERY stage of the proceedings), I would like to respectfully request to be able to keep 20% of the total refund.

This allowed for what I felt to be a fair share for my time and efforts, whilst still paying into the IVA 20% more than it would have received had I used their 'recommended' firm. My IPA readily agreed and, ultimately (as the IPA 'team' messed up too), I received a little more than the percentage I asked for.

Incidentally, I was very interested to hear of the undercover report by The Times journalist today - at every stage of the process (and I have a couple of other PPI claims still to make, so this is ongoing) I was discouraged by my IPA from pursuing the PPI claim myself, rather than using their 'recommended firm', with numerous reasons as to why their "other clients" found their suggested claims company more helpful. Although I did ultimately achieve the morally right and fair outcome, this aspect of the process was something I found extremely distasteful.

Best wishes OP. x