Individuals who have been paying for Payment Protection Insurance for their loans or other debts may qualify for a mis-selling claim against a bank or the loan company. Recently, this issue has become controversial as banks try to minimise the number of people who file a claim. Nevertheless, there have been a lot of successful claims made already. With this, those who have an existing Individual Voluntary Arrangement don’t have to pay their creditors or any PPI provider.
Maple Leaf Financial will review your Individual Voluntary Arrangement (IVA) and we will be happy to discuss your individual concerns and requirements : 0800 7747624
Can I Claim PPI when in IVA
However, Individuals who have obtained PPI and believe that it was mis-sold to them despite the current IVA have a reason to file for a claim. They should understand that the mis-sold PPI has nothing to do with the fact that they were unable to pay their debt and opted for an IVA.
It is also important to take into account that compensation received following a successful claim of mis-sold PPI while there is an existing IVA or when one is in the process of IVA application will be classified as a windfall. In other words, the compensation will go directly to the IVA and be used to pay debts from creditors.
Although there have been some concerns raised regarding this action, many Insolvency Practitioners actually encourage their clients to start PPI mis-selling claims while in IVA. IPs believed that the IVA has the responsibility to maximize their return to creditors. The PPI mis-selling claim will make this happen.
In contrast, other IPs believe that taking this course of action will only make the situation worse. This means compromising some creditors while benefiting others. They argue that filing a PPI claim while on IVA does not support both sides’ interest. Therefore, it must not be done.
However, there have also been concerns raised concerning IPs. It says that IPs also enjoy the benefits of successful PPI claims. This happens if they are paid based on the percentage of money the creditors receives from IVA. With this, some question their intention in encourage clients to make a claim as it may be self-motivated.
Delaying the PPI Claim
Consumers do have an option to delay their PPI claim until they have finished the IVA. Doing so will allow them to keep all the money paid without the worries. They may also start the PPI claim near the end of their IVA. This is because the claims process can take months or even years. This means any compensation may not be decided until after the IVA is completed.
Communicate with the Insolvency Practitioner
The decision to file a PPI claim rests in the consumer’s hands. Parties involved in IVAs do not have the power to make mis-selling claims. Even if the IP encourages them to do so, it will always be a personal choice. However, those who decide to do so while they are still in their IVA have to understand that any compensation awarded to them will be sent directly to the creditor as a windfall. This is especially true when the arrangement is still in place.
With this, it is important that consumers communicate with their IPs directly. They have to inform them when making a claim. Doing so enables the IP to make arrangements so that the compensation and other related fees will be paid directly to the IVA.
Making the PPI Claim in IVA
If the bank pays the claim directly to the client, it is paramount that they tell their IPs about this. Otherwise, it may lead to IVA failure. Clients should also understand that they must not spend the money received even if they need it for emergency purposes until the IP knows about it. There should be an agreement between the IP and the client before they can keep all or even some of it.
There are also instances that compensation is paid directly to the IPs for clients making a PPI claim while on IVA. IPs will most likely use the funds to pay for debts that the client owes them. This is why it is crucial that the individual filing for a claim and their IPs work together and cooperate. Failure to do so will cause the IP to fail the existing IVA.
Again, it is best not to start the PPI mis-selling claim until the IVA is completed. With this, there is a higher chance that clients can keep at least some part of the compensation.
The Bottom Line
Anyone can make a PPI claim while in IVA. However, clients must know both the benefits and drawbacks that come with this. They may delay it until their IVA is completed if they want to directly benefit from the claim. Otherwise, they will not be getting anything as it will be used to directly pay off debts.
Also, clients have to work together with their IP to avoid any troubles later. Although IPs may encourage them to make a claim, they always have the final say. Clients have to weigh their options before taking any action.
PPI Claims & IVA: Resource
Can i claim PPI AFTER IVA ?
New legal advice has come forward that could help UK residents involved in Individual Voluntary Arrangements (IVA) to make claims against banks that mis-sold them Payment Protection Insurance (PPI).
In a nutshell, individuals who entered into an IVA scheme may be able to make a claim if any accounts in the IVA bundle were covered by a PPI. The key here is that the claimant must be able to prove that the PPI was mis-sold by the lender.
Delays caused as IVA Debtors are forced to Claim PPI
There are numerous people who have to work through debts that came about through an Individual Voluntary Arrangement or IVA. Out of all these individuals, roughly 1,500 each month have to claim PPI they do not have. The claim process forces these individuals to spend more time than would normally be necessary to exit the insolvency register.
Dealing with a PPI compensation claim in IVA
In the UK, individuals may opt for an individual voluntary arrangement, or IVA, as an alternative to bankruptcy. In an IVA, the individual essentially enters into a contractual agreement with his or her creditors to be pay back any outstanding debts, with the exact circumstances being flexible based on the debtor’s income, capital, and other payments.
Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim
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