www.iva.co.uk

Hi All,

As most of you know my IVA completed last year. I recently made PPI claims against a number of creditors in My IVA and to my surprise I was successful with RBS on both a loan and a credit card account. I have been waiting for the payment of the compensation for over a month so today decided to telephone them to chase up the cheque, and to my astonishment was told that they had been paid into the respective accounts to reduce the arrears! They had no record of an IVA and as far as they were concerned both accounts were still open and therefore any payment would go into them. as you can imagine I almost exploded with rage at the poor guy on the telephone and it has taken several hours for my blood pressure to return to normal..... Phew rant over. My questions are as follows:

1. Are they correct? does the account indeed remain open in perpetuity after completion or does it cease to exist (i.e. is deemed as written off upon completion.

2. By not closing the account and writing off the remaining balance in line with the agreement are they technically in breach of the agreement?

3. Do I have a case for further compensation or other legal remedy against them to force them to close the account and backdate the closure to the appropriate date.

4. Am I in fact entitled to receive any compensation payment on the basis that the account was part of an IVA or are the two things distinct from each other?

Sorry to be so long winded but I need to cover all the bases. I would be especially grateful if one of the forum experts can advise on this. I have calmed down now but I was seriously angry earlier (not like me I can assure you) but if the bank think they are going to roll me over again I can assure you they have picked the wrong guy.....!!

Thanks all in advance for your help...

Firefox

Hi! I'm not sure what they meant by the account being open as it should be closed when the iva completes and outstanding debt written off. The legal eagles have recently decided a PPI refund is an asset at the time the iva is taken out; therefore due to creditors. The next bit is a grey area. Some creditors are treating this asset as if it were available (albeit unclaimed) during the iva i.e. using it to Improve their dividend. I think there is a thread somewhere about someone challenging this and they won.

After reading BOL's post, I am not sure that this will matter but have you had your completion certificate?

Hi Firefox,

RBS do tend to pay it into to the accounts if they are open, but if they are closed and you had arrears they have been known to 'keep' the funds towards the interest and balance that has been written off.
I had an RBS PPI refund last year prior to my IVA, which lucikly I was given a choice or whether I would like it off the balance or a cheque. I took the cheque and it paid for a deposit for my new car, which I desperately neededm but if I had been in the IVA at the time, they would have swallowed it up.

Hi,

Completion cert was dated 24th Nov, my understanding is that at that upon completion the debt is satisfied and therefore there is no further liability at that point therefore in theory nothing against which to set off. One other angle to consider is this; any balance which was effectively inflated due to PPI and was then included at the gross level in the IVA would have resulted in an understated dividend to creditors, In other words your percentage dividend on the true balance of liability (which of course would be net of PPI) should have been higher.

I have an appointment with my solicitor this morning, an initial chat with him suggests that the bank is fully liable and it could also be argued that the are not closing down accounts in order to mitigate against future PPI claims from debtors who have completed an IVA. I fully intend to take RBS to court on this if I have to, I doubt they would want to go down that route given the cost but like I said if they want a fight, they've got one!

Playing devils advocate, it could be argued that the debts were settled by both parties and you undermined that agreement by claiming PPI so the bank acted accordingly.

Hi,

Have just finished with the solicitor, the position actually is very straightforward and is the following: Upon completion any balance should reduced to zero and the date of completion is the effective date. If the bank then decides to keep the account open it would have a zero balance. If you think about it this is the precise purpose of an IVA i.e. to reach an agreement whereby the balance is written off and the debtor can move on with improving ther credit file. If the bank do not zero the balance then this would continue to be reported in perpertuity and show a continuing default. This being the case the bank essentially has nothing against which to set off. The bank have made a payment which they describe as a "goodwill" offer without admission of liability, however again the legal position would be that if the bank were ecertain that no liability existed they would not make an offer, however not admitting liability means that they can at any time and at their discretion withdraw the offer even if it has been accepted by the boroweer, at which point the borrower would have to pursue the bank via the courts or the FOS.

In a nutshell the bank is fully liable.

Update.... It seems that the banlK now agree with me... what a difference a day makes.

That's good news then FireFox. It pays to be persistent

thank goodness for that!

Well, I will believe it when I see it.... I quoted them chapter an verse the advice i received from my solicitor and they immediately backed right off. Interestingly they had not even registered the IVA so when I finally got through to the department that deals with the CRA's and closing everything off (who were very helpful it has to be said) they told me that because we were not on the insolvency register they couldn't verify the IVA, despite them having been paid. Bizarre! Anyway it should be sorted on Monday, They wil reverse the transaction on PPI and issue a cheque. To be fair that particular department was very helpful and they promised to call me on Monday morning with an update, I guess they have no axe to grind and are probably measured on efficient closure of iva or BR cases so they could probably do without such a cock up.... No wonder RBS is in such a mess. ut like I say, i will believe it when I see it.

Well done - it shows it does pay to challenge decisions ! Let's hope your cheque arrives next week and you can enjoy it !