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What happens with PPI if I’m repaying my debts?

PPI or Payment Protection Insurance mis-selling claims relate to insurance that a creditor may have mis-sold to an individual.

If you were incorrectly sold Payment Protection Insurance, you may have the right to claim it back, before the deadline of 29 August 2019.

I’m in an IVA and believe I may have been mis-sold PPI

If you believe you are entitled to refund for being mis-sold PPI and you are in an Individual Voluntary Arrangement (IVA) you should tell your Insolvency Practitioner.

PPI can only be claimed with your consent, however if your Insolvency Practitioner thinks that you may have been mis-sold PPI, depending on the terms of your IVA proposal, they can ask that this is checked and the refund may need to be paid directly towards your IVA.

You can of course, opt to claim a PPI refund yourself – again all of the refund you receive may still need to be paid into your IVA.

If you decide to use a claims service, you will need to ensure you can pay for any fees they may charge.

Why should my PPI refund be used to pay my IVA?

In most Individual Voluntary Arrangements (IVA) proposals, PPI refund is actually classed as an asset. This makes PPI refund something of value which can be used to help pay off your debts and therefore the full amount you receive must be paid into your IVA arrangement.

While you may believe this PPI refund money may be more beneficial to be paid to you to help towards your everyday expenses, your Insolvency Practitioner has an obligation to supervise your IVA based on the terms in your IVA proposal. This is why PPI refund may need to be paid into your IVA.

Depending on the size of your claim, it may even reduce the length of the IVA term.

What if my IVA has completed?

Remember to always keep hold of the terms and conditions of your IVA, as PPI refund may have to be paid into your arrangement even if it has been completed.

If you have any changes in your financial circumstances during a plan, then you should contact your IVA company and let them know.

What about a DMP or Trust Deed?

PPI in a Trust Deed is treated the same way as an IVA. In a DMP, there is no obligation for clients to pay any PPI claims into a DMP – it is completely your choice.

In a DMP, if you receive a big pay-out, you could consider using it for full and final or part settlements with your creditors, or other debt solutions that may be more appropriate for you.

Want more information?

For more information on IVAs please go to payplan.com/iva. Or If you, or someone you know are struggling to pay your bills and want money advice then get in touch with PayPlan today on 0800 716 236 or visit payplan.com