IVAs and PPI – the Law changes

IVA on desk

If you have had an IVA in the past, you need to read this before beginning any PPI complaints.  On 2 March 2017 the Court of Appeal decided that you cannot keep any PPI redress you win EVEN if you have completed your IVA .

The Court reversed an original ruling and a later appeal which both took the opposite view.  Originally the courts had decided that you could keep PPI compensation if your IVA was complete.

What does this mean?

  • It means that companies (banks etc) should pay PPI redress/compensation to your IVA supervisor/insolvency practitioner who may then decide to distribute to any creditors.
  • This puts those who have had IVAs in the same position as those with discharged bankruptcy orders – it’s possible you may not be able to keep PPI redress and need to check first.
  • The logic is that PPI redress is a refund of money the person had in the past.  It’s not new money being received after the IVA finished.
  • If this affects you and you use a PPI claims company you could find that any PPI redress goes to your creditors. But you would still owe a fee to a claims company.

Does this apply to me?

If you’ve had an IVA, then probably. It’s not possible to say for certain. This ruling may not apply to all IVAs.  The situation depends on exactly how your IVA company set the IVA up.  It comes down to legal details on how trusts work.

Also – if you are trying to re-claim PPI which you paid after completion of your IVA, this wouldn’t apply to you either.

What should I do?

If you’ve had an IVA or a Scottish Trust Deed and you want to re-claim PPI, contact your IVA supervisor before proceeding. Ask for their written confirmation that PPI redress will come to you before starting a claim. Otherwise you’re possibly wasting your time and it could cost you.