PPI & IVA - moral question

[Ypnos]

Hi all

 

I am in my 4th year of an IVA.

 

Today I received a phonecall from my insolvency practitioner saying that they have hired a PPI reclaim company to look into my case. He said that due to the fact I'm so far into my IVA, there is a chance it could end early if the PPI is high enough.

 

However, there is obviously a chance that it could fall short or there could be none at all. What bothered me is that if there is not enough, the creditors get this "windfall".

 

So if I understand the situation correctly, the creditors could use the money they fraudulently obtained to pay themselves? But what really irks me, is that if this PPI (which I have never asked for) had figured into my repayments, I may not have felt the need to enter into an IVA in the first place...

 

So, if I (for example) owe £10000 and I am currently paying £5000 back over the course of the IVA and the PPI "windfall" is £5000, that means that the creditors are still paid in full and I still end up with a shattered credit record and really I needlessly entered into an IVA.

 

Have I completely missed the point or is this totally immoral? Has this been tested in court?

[sequenci]

Hi there. I'm not sure if there is a test case in relation to this but the general feeling is that any assets - or rights to bring action - should usually vest with the IP, and as such they would be obliged to seek the maximum return for the creditors. It's part and parcel for all IPs to try and reclaim PPI as part of the IVA procedure. Moral or not they could fail the IVA if you do not cooperate.

[Ypnos]

Don't get me wrong, I'm happy to co-operate as I have nothing to lose. But, the fact remains that mis-sold PPI isn't an asset as such, it's fraud money. Moreover, it's fraud committed by the very people whom we are repaying in the IVA.

 

When I signed up with my insolvency practitioner (who, ironically, became insolvent a couple of months ago!), I was told that his job was to be an independent referee whose job was to _not_ look out for one's party's interests over the other's. If the IP is there to maximise profits for the creditors, then surely he is in breach of his role...but that's another matter altogether.

[sequenci]

I see your point, but you could potentially be stuck between a rock and a hard place.

 

Incidentally, how much debt was written-off under the IVA?

 

Would you agree that you would have never needed the IVA should the PPI not have been mis-sold?

[Ypnos]

Well, I have not yet received the official figure for PPI but the guy said that as I have 4 separate sources of credit on the IVA I should expect at least something and anything under £500 is not considered a windfall and I can keep it.

 

As for numbers, if memory serves, I'm paying 75p in the pound. I'm rubbish with numbers so I honestly can't remember how much I owed and how much I've paid off

[sequenci]

No worries. It's an interesting one for sure. You see with bankruptcy any potential reclaim MUST vest with the OR. As far as I'm aware, and others may correct me on this, with an IVA it's not an automatic thing but likely to be written in to the terms of the IVA. Most practitioners worth their salt would have asked prior to drawing up the arrangement as to whether or not a right exists - that said the whole PPI thing wasn't really that big back then, well certainly not as much as now.

 

I'll see if I can find any other info for you.

[Ypnos]

Great, thanks