IVA and more PPI

moogfoot

Hi,
Been a while since I last posted and have been paying my IVA and now have 21 months to go and am now paying £260 per month.

My total dept level was at the start £27,000

Two years ago I received a PPI claim for £14,700 which went straight into my IVA.

I have paid in on monthly payments a total of £8400 to date.
This gives a total of £23,100.

I have now been awarded another PPI claim of £7400, this one was for credit card PPI, the previous one was for loan PPI.

I have the cheque and have paid it into my building society account "for safe keeping", knowing I have to tell my IVA supervisor soon.

When I pay them the cheque it will take my total paid back to over 30K.
What are my chances of getting this IVA ended now I have this PPI cheque to pay in, as a full and final payment?

If I am made to pay my IVA through to its natural completion I will have paid back over 35K.

debtfree2016

Hi Moogfoot,, as I understand it all PPI payments will not reduce the amount owed. Sorry to be the bearer of bad news.

sourcrates

Hi,
As with any debt, you can make a full and final offer to your creditors.
Decide what would be a fair amount, then contact your IP`s office, explain what you want to do, and they will set the ball rolling.

It will require a creditors meeting to consider your offer, remember your creditors are always looking for a deal that brings them the best return, so think carefully how much you offer them.

They may accept, decline, or make a counter offer to you.

If rejected, your IVA will continue as normal, so may be worth a shot.

debtfree2016

I think the problem is the fact that its a PPI refund ! I would like to agree with sourcrates that you could make an offer as an F&F but I feel they will deem this money to be an asset and not part of the original agreement. You would only get to see the 8% interest.
If you have banked the cheque it will show on your statements. if you make the F&F they will ask how you plan to raise the money normally a third party makes the offer on your behalf.
You will need to inform them of the refund and they will ask for it to be paid through the third party like Equity in Finance who will take a cut of 40%.
Going back to the £14700 I very much doubt that is reflected in the amount still owing.
I understand what you are saying and its an absolute pain in the a££e.
Best of luck

mwarby

I agree, as far as creditors and IVA company are concerned, the money is already theirs, so it cant be used for a full and final.

The good news is that the PPI might reduce the number of future payments as you only pay debt+ ip fees and possibly statutory interest, if the PPI refund takes you over that you get the balance back

phil2580

moogfoot, here's my breakdown based on my experience in the IVA industry.

By the looks of it, you have paid in the following:

PPI Refund 1 - £14,700
PPI Refund 2 - £7,400
Contributions - £8,400
TOTAL: £30,500

Now, I'm going to average your contributions to date at approx £215 per month.

Based on normal criteria, at that level, Nominee fees will be 5x contributions, so £1,075.

Supervisor fees would be 15% of anything received after that, so (£30,500 - £1,075)*0.15 = £4413.75

Allow, say, £500 for disbursements (postage, software etc) gives us:

Total Paid In: £30,500
Less Nominee Fee: (£1,075)
Less Supervisor Fee: (£4,413.75)
Less Disbursements: (£500)
Balance for creditors: £25,011.25

As your total debt is £27,000, you're still short of 100p/£ and being able to automatically complete early.

You have 21 months to run at £265, which would equate to a further £5,565 before fees, £4,730.25 after, meaning that if you were to continue paying to the natural conclusion of your case, you would, on first look, appear to have overpaid.

However, there is a nasty thing called statutory interest, which becomes payable if you hit 100p/£ (or at least as much is payable as possible). Given your debt level, it is entirely possible that the remaining funds would be eaten up by statutory interest.


In my experience, creditors are reluctant to accept F&F offers from PPI refunds, unless there are other compelling reasons why the IVA cannot continue.

Also, be wary of being asked to pay fees to any Claims Management Company (unless you engaged them to do the initial claim). Unless you have a contract with them (e.g. Equity in Finance), you are not liable for ANY fees to them. Pay the money directly to your IP, don't pay it to anyone else first.

Also, don't expect to get the interest element back - Grant Thornton (in particular) have used this as a sweetener to get people to sign up with their CMC (from which they get a nice little kickback), but the reality is that it should all be entered into the IVA as it all represents an asset.

Hope this goes someway to answering your question.

barge

Default PPI Refund accepted as IVA settlement 😀
I just contacted Lloyds bank by phone regarding PPI they said they would look into it. I had no account details of dates etc. they called me a few weeks later asked a few questions, not many could I answer. I then waited a further 6 weeks and received a letter saying I was due a PPI refund of £14k ! I read on to discover this would be paid to my IVA supervisor my heart sunk. I then did some reading up including this site and followed advice to ask my supervisor to offer the PPI refund in full and final settlement of my joint IVA ( husband and me). The supervisor said it was a possibility I had to write a letter detailing my current circumstances and why I would like them to accept the offer of settlement. We were just over 2 years into the IVA which we had fully complied with and the second year had paid slightly more each month following the annual review. A creditors meeting was called and the offer was accepted 😀😀
We have just received our certificates of completion it's such a relief now to rebuild our lives . Thanks for the advice on this site.