IVA company refusing to issue termination certificate unless I take out PPI claim. Is this legal ?

[David Mond]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Andy Davie

Hi

David quote "I don't subscribe to the view that it is the poor debtor that suffers and his/her goal posts have moved. The debtor has compromised his claims in respect of what he/she owes, and endeavours to pay back as much as he/she can to his/her creditors."

I have often praised you on this forum David but, with great respect, you are way out of touch with Joe Public on this one.

I do not dispute that assets have to be realised but the IVA is an agreement on both sides, the debtor signs to agree the terms of the IVA, and there has to be safeguards built in to protect the debtor from a never ending arrangement.
No one in bankruptcy, to my knowledge, has been stopped from automatic discharge after 12 months due to outstanding PPI claims, we need debtors IVAs to conclude within the original time frame and any PPI claims outstanding dealt with after the completion statement issued, however difficult or complex this may be on the part of the IP

Regards

Andy,

The Insovency Act 1986 ensures within a Bankruptcy and after discharge the Trustee is empowered to get in any asset that accrued to the bankruptcy estate notwithstanding the bankrupts discharge.

There is no such provision within the legislation that gives the Supervisor such power. Also no-one was aware of such mis-selling claims until last year.

All new and current ClearDebt IVA's now covers that contingency.

Having spoken to the Regulators I can assure you that ClearDebt's current stance is correct and one which should be adopted by all IP's otherwise they are in breach of their statutory responsibilities.

You refer to a "never ending arrangement" - that is not the case and just and when proceeds are received into the IVA estate and all other matters relating to specific debtors compliance have been dealt with Completion Certificates can be issued.

The problem is that certain debtor's are attempting to try and ensure that any of their PPI mis-selling claims are kept outside and don't belong to the IVA estate - fortunately only the minority.

I have mentioned that we are looking into a way where we can do a mass variation on cases being completed within the next 9 months to allow for the Completion Certificate to be issued after the relevent period of the IVA. The mass variation will include specific clauses to ensure that PPI mis-selling funds are paid over to the Supervisor (or former Supervisor) - watch this space.

So we as ClearDebt are aware and are trying to do something.

Regards

David

[Jamie.73]

Mel you miss understand its 80% of IPs running circa 20% of IVAs (Usually a secondary thing for them) that are unaware. The top 10 are all aware and running circa 80% of IVAs, and 9 of them are acting in line with the situation. Which is a tough one as to be frank to service a back log of 10,000`s of IVAs for PPI is a huge task. I believe EIF are processing circe 40k IVAs and considering that the total number of active IVAs in the market is around 180k back log(40-45k per year less 20% failing)its a huge job. Generally speaking a good job is being done. It takes approx 120 mins to fully audit and process 1 file (assuming FOS is not required) so for people to clear the back log you need 450,000 man / people days just for the back log.

[Adam Davies]

Hi

I think most of the larger companies have dived for cover with all the questions and concerns over PPI and it has been left to Melanie and David, almost single handedly, to try and defend the industry and they should both be applauded for this.

Sometimes you have to look at a situation from the Joe Public perspective and if you do the PPI issue surrounding IVAs have been quite simply appalling. The vast majority of debtors are only interested in receiving their completion certificate on time. They are not interested in the PPI issue, and it is simply down to the supervisor of the IVA to sort this without affecting the debtor.

Only now it appears that the regulatory bodies have woken up and are hopefully going to agree that completion certificates are awarded whilst PPI claims are still ongoing. How the supervisor of the IVA deals with any complications and logistic problems in doing this is an area that your average Joe Public really isn't interested in.

Regards

[David Mond]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Jamie.73

Mel you miss understand its 80% of IPs running circa 20% of IVAs (Usually a secondary thing for them) that are unaware. The top 10 are all aware and running circa 80% of IVAs, and 9 of them are acting in line with the situation. Which is a tough one as to be frank to service a back log of 10,000`s of IVAs for PPI is a huge task. I believe EIF are processing circe 40k IVAs and considering that the total number of active IVAs in the market is around 180k back log(40-45k per year less 20% failing)its a huge job. Generally speaking a good job is being done. It takes approx 120 mins to fully audit and process 1 file (assuming FOS is not required) so for people to clear the back log you need 450,000 man / people days just for the back log.

Jamie.73 - do you want a job as a Statistician?

[Foggy]

David, there are three kinds of lies: lies, damned lies, and statistics !!

[David Mond]

Andy,

I take your point BUT

What happens to placate Joe Public all IP's issued the Completion Certificates and Joe Public turns round and sticks two fingers in the air?

What can or will the IP do?

The IP will be exposed to the wrath of his/her regulator that could end up with the IP losing his/her license and/or their living.

I agree that after 5 years of blood, sweat and tears and remarkable budgeting etc etc the debtor wants his Completion Certificate - as stated we are working on ways to accomadate this.

Regards

David

[MelanieGiles]

I don't think I did misunderstand you Jamie - the context in which your post was made was confusing for our lay posters in that it indicated that in 80% of IVA cases the IPs were not taking things seriously or had not thought about mis-sold PPI claims. I am not sure which firms you are speaking to, but at both the SPG forum and the Insolvency Today conferences held over the last couple of weeks - where most IP firms would have been represented, PPI was indeed a well discussed topic.

Most people that know David and myself will know that we take a personal interest in legal and technical matters, and whilst we do take the brunt of the flak occaionsally, that is no excuse for sitting around and doing nothing - or worse still doing something that ends up not being right.

[MelanieGiles]

We simply need the agreement to be able to issue Certificates of Due Completion to assure the debtor that their obligations to account are finalised, which allow the IP to continue to pursue assets - as is the case with PTDs.

One downside of this could be that a debtor could then refuse to co-operate with the office holder, and there would then be no penalties to exercise which could prejudice the recovery of the asset. So the Supervisor would have to ensure that all ducks were in a row before being persuaded to issue.

[David Mond]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by kieser

Surely This statement below should only hold true within the timeframe of the IVA Agreement.

"A debtor is obliged to comply with all reasonable requests made by his/her Supervisor".

Not after the client has made all of their payments......

Kieser,

That is the point - the client does have to - especially when there are unrealised assets belonging to the IVA estate.

[Muggins]

Does that mean then David that all the firms who are not pursuing ppi will lose their license? Or is some of it the fact that they have other means of income other than the 15% realisation fee! I'm still at a loss as to why some firms are saying that they will enforce bankruptcy and others are not! Nobody seems to answer this one! Until it is all set in stone surely you cannot lose yr license!

[Sam Hawkins]

I agree with your comments Andy. It is a minefield and we are all waiting for it to be cleared up. It does take one or two good pioneers to get it right, especially as the two mentioned are primarily concerned with getting the right answer and not just any old answer.

[David Mond]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by MelanieGiles

We simply need the agreement to be able to issue Certificates of Due Completion to assure the debtor that their obligations to account are finalised, which allow the IP to continue to pursue assets - as is the case with PTDs.

One downside of this could be that a debtor could then refuse to co-operate with the office holder, and there would then be no penalties to exercise which could prejudice the recovery of the asset. So the Supervisor would have to ensure that all ducks were in a row before being persuaded to issue.

Hi Mel,

That is exactly the point I have made in an answer to Andy.

Hope yoiu are well and thanks for flying the IP flkag.

Speak soon.

Regards

David

[David Mond]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Muggins

Does that mean then David that all the firms who are not pursuing ppi will lose their license? Or is some of it the fact that they have other means of income other than the 15% realisation fee! I'm still at a loss as to why some firms are saying that they will enforce bankruptcy and others are not! Nobody seems to answer this one! Until it is all set in stone surely you cannot lose yr license!

Potentially yes they could lose their license -
it depends exactly what they are doing or not doing.

Each IP has his or her approach as to whether threaten bankruptcy if non compliance or whether to ignore the issue.

Your sceptisism about fees is mis-placed - yes fees are earnt but a lot of work has to be done to earn same.

[MelanieGiles]

This has absolutely nothing to do with earning income Muggins, but everything to do with recovering assets which is the duty of the IP.

I do not think that any Court in the land would make a bankruptcy order against a debtor who had fully complied with all of the terms of their IVA, but was not seen to be co-operating with their Supervisor. But the Court would want to undertand the nature of the dispute and could compel the debtor to provide the information required, or allow the Supervisor to pursue the asset as beneficiary of the trust.

[Jamie.73]

Well it seems to me a conclusion has been made a" certificate of due completion". The issue of some debtor clients not co operating is irrelavent as most will. Those that dont would need to be considered seperatly.