in an IVA, PPI refund received but wan to pay off family and friends
Hi
My friend is in an IVA, she received several PPI refunds recently, which she wants to use to pay off family and friends. She did mention these personal debts during the IVA application but the family and friends decided to exempt from paying it back. They have recently asked for it back and she's been holding it off.
Can she ask stephchange to not use the cheque to pay the creditors and instead pay family and friends off?
Also only one PPI refund cheque was sent to stepchange and the other cheques she received directly, can she just use those cheques to pay off family and friends?
Thanks
My friend is in an IVA, she received several PPI refunds recently, which she wants to use to pay off family and friends. She did mention these personal debts during the IVA application but the family and friends decided to exempt from paying it back. They have recently asked for it back and she's been holding it off.
Can she ask stephchange to not use the cheque to pay the creditors and instead pay family and friends off?
Also only one PPI refund cheque was sent to stepchange and the other cheques she received directly, can she just use those cheques to pay off family and friends?
Thanks
0
Comments
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No, under no circumstances should that money be used for anything other than the benefit of her creditors, (windfall clause) she does not have a choice here.
Her IP has claim to any and all PPI claims even after completion (Google Green v Wright).
There may be severe consequences for her if she does not inform her IP of the payout.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
even though she applied for these PPI many years back before IVA and they did not refund her but now they have replied saying they will refund her?
it is these creditors that got her into this mess otherwise if she got her PPI refund initially when she applied 7 years ago she wouldn't have got into the debt and hence get into an IVA. is there any way of fighting it?0 -
It sounds like these PPI refunds could be a substantial amount, this IMHO makes it much more important to be open with the IP. It may well be that the IVA will end early if the amounts cover the debts remaining and fees. If this is kept from the IP it could ultimately lead to failure of the IVA.
I think the friends are also out of luck, preferentially paying back debts to friends over debts to creditors(who are part of the IVA) isnt allowed for. It sounds rather like they want to be repaid now and in full, while the other creditors wait and get pennies in the pound.I'm fairly sure this would have been explained if mentioned during setup of the IVA. I suspect they will have to wait until after the IVA and rely upon them still being friends.0 -
Are you sure it's an IVA and not just a debt management plan?
If it's an IVA she'll be on the insolvency register.0
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