www.iva.co.uk

HI

I have been out of my iva for 2 years now and I have just got a ppi claim but this was sent to my ip who in turn sent it to me with a letter saying the following.
(In addition these funds are held by you on trust for your creditors and under the terms of your iva should be distributed pro rata between them) Because I have been out of my iva for two years do I still have to pay them this money

Welcome Derek. Can you offer a timescale of your IVA history. The reason I ask is if you have been 'out' of your IVA for two years, and you were in it for the full five years, it would mean the inception date of your IVA is circa 2006. Are you in possession of your completion certificate?

If this is the case, I would check your terms of your IVA very, very carefully with regards to assets, after acquired assets etc. Your arrangement and signed copy of same with your IP, in 2006, would have no idea of any PPI impact. I think possibly your old IP, has indeed moved your contractual goal posts to include and PPI refund. Who is your IP by the way.

Given the length of time from inception of IVA to now this does sound a little fishy to me and something I would possibly challenge. But of course you must check your accepted IVA proposal and acceptance first.

There are various PPI arguements flying about -- all untested.

If your IVA was "All assets" then PPI would be included by default. If it was "Defined Assets" and PPI was not defined, then it should not be included.

But .... some IP's are saying that failure to declare the PPI could constitute a breach ( even though neither you nor they thought of it at the time). My own, uneducated, opinion is that this particular arguement is merely a bullying tactic and is unlikely to hold water if tested ... but ... you never can tell.

Anyway ... should PPI be subject to the IVA ( even if closed) the IP can deal with it under the continuing trust the IVA created ( Gallagher Trust). This has been ratified by the Courts.

Moral and legal arguements collide here ... as ever.

As I suspected Foggy. I am of the same opinion.

I would say, as my house was, in my own IVA, it would need to be a defined asset. Therefore, Derek, certain variables now come into play.

If you have not got any PPI requisition in your IVA and it was prior to any new legislation, and if you paid your creditors, via your IVA 100% back inc. fees and if you have your CC, I would certainly challenge this. But the above is not exhaustive.

There could be a hundred reasons why you should challenge your IP and a hundred reasons why you shouldn't. But I think its got to be worth the cost of a phone call to find out. If you have money out there that is 'legally and morally yours' - then you should have it.

Oh how I wish someone would take these issues to Court so we could have a definitive ruling for all to follow!

And it's not just the PPI refund, there's also the 8% simple interest you get back too. And on which you get taxed - but if the whole lot gets sent to your IP because you're in an IVA, and you forget the tax issue, you could find yourself with an unexpected bill.

For me, it should be:
If the PPI claim is against a creditor, it goes into your IVA pot.
If the PPI claim isn't against a creditor you should pay it into your IVA pot anyway to help clear the debt.
You should get the 8% interest, and it shouldn't be treated as a windfall becauise you're taxed on it.
There should be a time limit (say, two years from the final report): otherwise, people who completed five years ago could be asked for any PPI refund, to settle debts which have been written off, sold on and CDOd (I read Peston's book - sorry).

I accept that others will disagree with me on this
Gary

The guidance notes issued to IPs by our regulators earlier on this year, made it clear that full provision needed to be returned to our clients for income tax due on the interest.

You do make some very interesting and sensible points in your post Gary.