IVA and PPI

Shankly969

Hello

I need some advice please. I’ll be very brief and factual but wonder if someone can answer some questions at the end.

Debt owed - £11,000
Debt repaid via IVA - £4700 ( 48mths @ & £98 )
PPI claim upheld and paid directly to IVA company - £7600.

So in my mind I have paid £12300 to IVA Company against an £11,000 debt.

I’ve spoke to company and they say NO, I have to continue the final year of my IVA payments because I’m legally bound by terms of IVA to do so.

But if I have settled the debt in full now via payments already paid and PPI payment, surely I should be released from IVA ?????

Can anyone advise please

Shankly969

Sorry I meant to add also , they said that I have to continue paying £98 a month for the full 5 years and that PPI money would not clear my debt it would just be paid to my creditors ???

ToxtethO'Grady

In an IVA you can pay back more than your debt = total debt + 8% statutory interest+ IP fees - you would need to check your proposal about how this would be managed.


Your PPI would have reduced the balances of the debts it was from, so if you had a debt with the bank of £10,000 they would just reduce the balance by the PPI - if it was £7,600 your debt would be £2,400 with them, your IP wouldn't receive any money as such.

sourcrates

As said above, IP fees will be about 8 grand, plus other associated fees to run the arrangement, people never read their paperwork correctly.

PrettyKittyKat

You need to pay 100% of your original debt (not the repayments afreed on your IVA) plus the IVA fees (which tend to be around 3k + 15% of payments + a few hundred for disbursements).

Ask your IVA company for a 100P in the £ figure and how much has been paid so far.

100p in £ figure - payments so far = how much there is left to pay. Once this paid your IVA completes, or you continue to 60 months and complete.

Shankly969

The IVA Company have received the cheque from the bank ( the bank wasn’t involved in the IVA ).

She told me on the phone that the creditors would receive 5p in £ now instead of 3p. In which case means from the £4700 I’ve paid they paid back £147 of my debt ?

And the £7600 they’ve just received they will pay out £380 to my creditors ????

So for the £12300 received they pay out £527 to my creditors ???? Reallly ?? Their fees can’t be more than the original debt ! Or am I being thick ??

PrettyKittyKat

5p in the £ is extremely low. That would suggest that your debts are much higher than £11,000.

Is £11,000 really the TOTAL debt you owed when you started the IVA? Or is it the payment amount agreed as part of the IVA?

Shankly969

Sorry Prettykittykat, I read it wrong. They are paying 31p in £
My “contract” states the fees are £2500 for the Iva.
I owed £11,034
I’ve paid a total of £4700 via dd so far
Plus the £7500 ppi payment.

When I complete the term I’ll have paid £5800 in dd payment plus any ppi payments, I’m expecting about another £3000 to be paid also.

Which will give a total of £16,300 paid in on a debt of £11,000 🤷!♂️🤷!♂️🤷!♂️ Which kind of makes me think IVA’s are a sham, even when taking their £2500 fee into consideration ( which they told me they get from my creditors ) means they will have received £2800 more than “necessary”. Surely the point of the Iva is to help not take more and more. ???

Yes I know, lesson learned ...

sourcrates

And that is why IVA’s are not suitable for small amounts of debt, they were originally designed for people with property who had large debts but could not go bankrupt.

The claims about writing off large chunks of your debt only really apply if your total debt is very high, and your disposable income is low, other options may suit you better.

Shankly969

Yeah, it’s a bit late now though after 4 years of paying it.. ��

PrettyKittyKat

The thing you have to remember is that you have been protected from any of those creditors taking further action for 4 years, and are still protected. You have also not had constant calls from them regarding payments or several payments to manage. I presume that your IVA payment is also lower than your debt payment previously, which has meant you have been in a better position for the last 4 years. There was no guarantee that you would receive PPI funds and if you had not you still would have completed your IVA as you will with no further implications. So although it can be tempting to focus on the fact that you have 'paid more back' you need to focus on the benefits of the IVA and be proud of the fact that actually in the end you managed to repay everything.