www.iva.co.uk

After being in a DMP with Vincent Bond for nearly 4 years and using money offered by friends and family we made a one-off F&F IVA offer in June 2013 which specifically excluded our house and mortgage (some, but insufficient equity).

After being initially rejected by HMR&C, this was finally agreed by them two weeks later as largest creditor with 57 variations. We paid over the agreed amount in July 2013.

At the time we had mortgage arrears of £3,700. This figure is slightly less as at today, but EIF are chasing for PPI and we have had to sign an Assignment of interest for DFD (which is hopefully going to be accepted in a couple of weeks ata Variation Meeting) in order for us to reeive a CC.

My query is, if the PPI claim is successful after we have (hopefully) received our CC, can we ask for our mortgage arrears to be deducted from the claim, would the lender automatically deduct the amount of the arrears, or would all the claim be ours and outside of the IVA?

If the PPI relates to the mortgage there is a possibility that the mortgage company could offset against their debt. Whether this would reduce the balance or the arrears I do not know but it is certainly worth asking. If the PPI relates to anything other than the mortgage it is likely to be an asset of the IVA or offset against any debts within the IVA but check with your own IP to be sure.

I think that it is very likely that the mortgage company will use the claim to offset against the arrears - and they probably have this right within the terms of your mortgage deed. This actually would work to your advantage, as otherwise DFD will claim the proceeds as an asset and use the funds to make a further distribution to your creditorsm regardless of the earlier full and final settlement offer.

Thank you both for your response. We are hoping that this would be the case, as we have kept up to date with current mortgage payments, but repaying the loan to friends and family does not leave us with anything to spare to clear the arrears.

Do you think it would be ok to contact the mortgage company to discuss this, even though we have signed documents for EIF to act on our beghalf?

There is no problem in you doing this at all - the right to the claim rests with you and not EIF.

I have subsequently been in touch with the Mortgage Company and they have stated that there policy is that for anyone in an IVA they will send all monies to the IP for the benefit of the IVA.

I have also spoken to DFD Customer Support who after consulting with "an in-house expert" stated that the whole amount of any PPI Claim would have to go for the benefit of the IVA Creditors, even though the mortgage and house was excluded.

Can this be right? The IVA was meant to be a one-off full and final settlement and so I cannot understand it!

It may be worth speaking to Judith at DFD who posts here as she has been a great help to other DFD clients. It may depend on the actual wording of the proposal and the terms and conditions and perhaps you could seek independent legal advice. This could be expensive but depnding on how much money is involved it could be worth it.