Claiming ppi when in a Iva

Trotter07

I have received a offer for ppi but I only have 1 more payment to be made to the Iva. My payment comes out on the 19th and the will b the final payment to a 3 year plan. I have 28 days to send the letter back which would b the 5th February and was thinking of holding of until then. Do u think I will be able to keep the money!!!!!!!!!!!!:eek:

Find_The_Real

Hello Trotter

Are you sure it is an IVA as they normally last for 5 years and not 3 (unless you have made a full and final offer)?

Unfortunately the PPI will probably be captured as a windfall if it is an IVA and will be required to be paid into your IVA. Some companies let you keep the 8% interest - which also has to be declared to HMRC as that part is taxable - others take it all, it really depends on which company you are with.

The creditor if you have debts with them on seeing you are in an IVA may also attempt to offset against their own debt if the PPI is from a creditor.

Was the claim made outside of your IP as many use their own claim firms for PPI and so the money quite often gets paid direct to the IP.

However there does need to be clarification of what debt option you are in as it will affect who gets to keep it, if it is an IVA then no, if you do receive payment it needs to be paid into your IVA, holding on until after your payment date will not change the outcome of that.

drslide

does this mean the windfall will pay off part or all of the existing IVA?

longtermplanner

drslide wrote: »

does this mean the windfall will pay off part or all of the existing IVA?

The windfall goes to the creditors.

That doesn't reduce the amount the debtor has to pay to the IVA* because that amount is set at the amount the person can afford to pay, not a fixed percentage of the debts outstanding. So the term "pay off part of the IVA" is not very meaningful.

* unless it was large enough to clear all the debts and IVA fees etc. Which would be unlikely with a PPI payment, but could obviously happen if their was a very large inheritance.