If you are interested in filing a claim related to the mis selling of PPI, here is an outline of some of the likely outcomes related to compensations or refunds you receive while subject to an IVA.
Presuming you are part of an IVA, or Individual Voluntary Agreement, and you are sure that your PPI was mis sold, then it is possible to launch a claim related to PPI mis selling.
Recovering PPI in IVA
It is not a relevant fact that you might not have been able to pay back the debt afterward and are now part of an IVA, as the two situations are not related to each other from the standpoint of a court of law.
That said, it is necessary to understand that if you are able to receive any kind of payment or compensation while you are still subject to the terms of an IVA, that compensation will count as windfall, legally speaking.
In other words, you will be required to transfer the payment to your IP, from where it will be transferred into your IVA in order to balance the debts you have with your creditors.
Additional PPI compensation must go into your IVA
When many people begin their IVA, they are typically under the mistaken impression that the payments they agreed to supply on a monthly basis were fixed and would not be subject to change over time. However, this is not accurate.
The truth of the matter is that if your personal financial situation changes in a positive manner during the time you are subject to an IVA, you will actually be required to increase the payments you supply per month in proportion to the increase so that the general monthly sum you supply to your creditors goes up.
For example, if you are fortunate enough to receive a large lump sum of cash, such as through a fiscal windfall, regardless of the source, you will typically be asked to pay the sum of the windfall into your IVA. This is also going to be the case when your windfall comes from a PPI compensation payment.
The payment will not contrast or offset the balance left in your IVA, and the payments you make on a monthly basis will continue the way they were before the windfall. The cash windfall injection will do nothing except for increase the total amount you pay to your creditors on a monthly basis.
Am I required to make a PPI claim for mis selling?
In most cases, you are not required to file a PPI misselling claim if you are not interested in doing so. This is because if you do not feel like your PPI was missold, then you typically will not face an obligation to file a claim.
That said, an increasing number of practitioners who specialize in insolvency have begun to ask people who are under IVAs to file claims related to PPI misselling. The reason for this is that IPs have an obligation to maximize their IVA return in relation to all of the creditors who are part of the IVA.
Under your IVA’s terms, you are required to work with your IP, or insolvency practitioner. If you demonstrate an unwillingness to cooperate with your IP, he or she may have legal grounds to fail the IVA you are privy to.
This is the reason why you will typically have few, if any, other recourses if your insolvency practitioner requests that you file a PPI claim related to misselling while you are under the terms of your IVA. When this is done, any compensation payments that you may receive will go straight into your IVA to help settle your debts.
May I delay claims until my IVA is done?
If you receive a compensatory payment while you are presently under the terms and conditions of an existing IVA, there is a chance that you personally will not see any benefits to this compensation payment, since it is required to go directly into your IVA.
If, however, the payment takes place after you have completed your IVA, and you can supply a certificate of completion, then you will have full liberty to keep whatever money you acquire to yourself to serve your own ends.
This is why you might want to think about denying your PPI claim until the conclusion of your IVA, presuming you are not interested in giving your compensation or refund to your IP. This, of course, presumes that your IP has not already asked you to file such a claim.
As of this date, the banks have not yet provided any kind of time limit on the timeframe within which you are required to submit a PPI claim.
Because of this financial climate, even if you still have a considerable amount of time to go before your IVA is through, it is possible that you might be able to hold on to your PPI claim until your IVA is done, at which point you could file said PPI and receive compensation you could pocket.
Know your options
The take home message regarding PPI claims is that you will be required to pay your PPI payments into your IVA if you have an existing IVA at the time when you receive your financial compensation.
The payment typically will not impact your IVA payments, which typically will stay the same. However, if you have trouble making payments later, it might help you to have paid extra at one time.
PPI Claims News
Banks rejecting legitimate PPI Complaints
The recent increase in PPI complaints being recieved by the FOS is a direct results of Banks rejecting increasing numbers of legitimate PPI complaints being sent to them. The FOS has upheld 8 out of 10 PPI complaints forwarded to them.
This 80% of upheld complaints by the FOS highlights how the Banks are increasingly rejecting valid PPI complaints being made by customers.
PPI Complaints still rising for the Financial Ombudsman
A record 86% of all complaints made to the Financial Ombudsman service is about PPI mis-selling. In the first half of the year a reported 266,228 PPI complaints for mis-selling have been lodged.
PPI complaints show no sign of slowing down. We have recently reported that Barclays was recieving an estimated 1,500 PPI complaints per day, The FOS was recieving upwards of 2,000 PPI complaints per day in July
This backs up the theory that only around 1 in 10 people have actually made a PPI claim based on their mis-sold policy. With figures like these, we can expect to see PPI complaints rising for a while longer.
PPI Compensation payments boosting the economy
The Office of National Statistics has released figures suggestiong that the £10 billion in PPI compensation payments that have been made is boosting the economy.
This is nothing new in March we published an article where an analysis by Which? showed that UK consumers paid out £50 billion for PPI protection since 1996. The article also highlighted some other PPI statistics provided by the ONS :
The Financial Ombudsman Service (FOS) has been buried by more than 600,000 complaints about PPI since 2000. Nearly half of those complaints have been filed since July1, 2012. Between that July date and the end of December in 2012, 283,251 complaints have been filed with the ombudsman. That was an increase of 110 percent over the previous six months.
Monthly PPI Claims Payouts for July 2013 is £ 528 m
The Financial Conduct Authority (FCA) released its latest totals on monthly PPI Claim Payouts. July 2013 totals for PPI repayments was £528 million which brings the total of PPI Claims repayments made sine January 2011 to £11.5 billion.
The figures are collected from 26 firms and financial institutions that made up for 96% of all the Payment Protection Insurance complaints from last year.
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
Latest posts by Tim Capper (see all)
- PPI Claims Currently Show No Sign of Slowing Down - December 10, 2014
- Swaps (IRHP) Determining the Level of Redress - November 3, 2014
- FCA updates PPI redress for 2.5 million old PPI complaints - October 27, 2014