I am the IP in this matter and will respond to Cheryl.54 directly. Whilst I am registered as a user on here I do not regularly visit the site or post but this matter has been brought to my attention by someone who does. For the benefit of everybody else who has contributed to this thread I would make the following points:
I was initially asked approximately twelve months ago by a major creditor in IVAs (a debt purchaser) whether I, as an IP, was actively persuing recovery of mis-sold PPI in IVAs for the benefit of creditors generally. This particular creditor considers it my duty to pursue such claims and I would be surprised if they have not made the same enquiry of other IPs. In their opinion any benefit would fall under the windfall clause which is included in all IVAs and referred to the definition of bankruptcy property in section 436 of the Insolvency Act which includes "things in action". I have obtianed Counsel's opinion in this matter as the office of Supervisor is different to that of a Trustee in that asstets do not vest in me and I am satisfied that I am able to pursue such claims only with the benefit of a Power of Attorney. I am also further satisfied however that debtors in IVAs are probably obliged to provide that POA in order to assist me in maximising the return to their creditors in accordance with the duties imoposed on them by the Act. If the right of action exists at the date of the IVA then it falls within the definition of assets caught by the IVA and would not revert to the debtor on completion of the IVA.
There have also been issues along the way of whether creditors are entitled to offset any PPI rebate against their outstanding claims or whether they are obliged to pay the rebate in full into the IVA. Either way the general body of creditors will benefit by increased dividends.
It is for these reasons that I have only begun to pursue these claims in the past few months.
Should anyone have a different interpretation of the legal position I am certainly happy to discuss it away from this forum and I will be discussing the issue woith my regulator in a few weeks' time when they carry out my regulatory inspection visit but I can assure everyone out there that I am not doing this in order to earn more fees. As I say, it has been instigated at the specific request of a major creditor and I am NOT employing a claims management company.
Just wanted to say thank you for posting and clarifying things for the forum members.
I hope you manage to sort things out with Cheryl.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Juat one other point that comes out when I re-read some of this thread. The reason that credit card debts will not normally be pursued for mis-sold PPI is because the PPI tends to be charged monthly on any outstanding balance rather than as a lump sum premium at the beginning of a loan and as such are generally not held to have been mis-sold to the same extent. I am not saying they would never be pursued but that is a general rule of thumb. The real mis-selling has occurred on personal loans(both unsecured and secured)and hire-purchase/lease purchase agreements.
Surely you only have a claim - if you can prove the PPI has been missold ?
If the client takes the insurance in good faith and fully understanding the PPIs term and conditions. Then you would NOT be able to claim the PPI has been misold
So if the client documented that they took the PPI out fully understanding the terms and conditions of that policy, hence NO miselling, The IVA would have to complete ?
Hi David And thank you for coming to post. I think reclaiming PPI at the start of an iva is a good idea to help establish debt levels and benefit other creditors. I think the main issue was that it was being done post acceptance of a full and final when one would consider debts settled. The creditor should have no right to demand additional funds after this point anymore than they would be happy for debtor to reclaim PPI for their personal benefit after completing an iva. I guess it was a timing issue for me rather than a matter of principle or legality. also the point of contact was more forceful salesman than advisor but I know how hard this is to control! Thank you and I hope you stick around - its always good to hear from profesionals.
It's an interesting debate and I hope Cheryl gets it sorted quickly now the IP is involved.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I can honestly say that in all my dealings with the major creditors, and I speak and meet with them at senior level very frequently, that I have never been asked to pursue this sort of claim out of duty to the other creditors. I wonder if the other IP representatives who frequent this forum have?
I would be very interested to learn who this is - although from David's post I can probably guess. Similarly I would also be interested to know how much money has actually been recovered in this fashion once an IVA is in place. We are never too old or wise to learn something new - and this is definately a new one on me!
One thing still doesn't sit comfortably ... and that's the 25% commission the firm are taking. Far in excess ( I hope) of those fees charged in supervising the IVA. If these funds are to be introduced into the IVA surely the same fee structure should apply. The work involved isn't onerous (been there, done that).
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
David has already stated that his firm are not charging additional fees for processing the claims - assuming that this is done in-house and not by an external claims management firm - so presumably any eventual recovery goes to the general body of creditors in its entirity.
In times where IPs fee income has been slashed considerably over the last couple of years, I am suprised that creditors have the neck to ask for additional work to be carried out without remuneration - unless I have misunderstood this thread.
I was relying on Cheryls first post in this thread, Mel:
"I rang the IP Office a few minutes ago, PPI Claims section and was advised that this is a new rule in all insolvency cases. I then asked him who will be benefiting from this money, they will get 25% and the rest will be sent to the Creditors. "
We have a variance.
I agree that the additional work has to be paid for, but ought to be in the region of the fee structure agreed for the IVA work. So maybe 15% as opposed to 25.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
The Financial Services Ombudsman is currently receiving around 2,500 PPI complaints per week. That doesn't include the many other claims that are being handled directly between the banks and the CMCs.
Given the sheer scale of the mis-selling it seems to me that debtors and IPs cannot afford to ignore the potential benefits that a successful claim would bring to an IVA:
(i) overall creditor claims could be reduced
(ii) there may be recoveries that can be paid into the arrangement for the benefit of creditors generally
(iii) other creditors with valid claims will receive a higher dividend
(iv) where claims are large, there is a possibility of an IVA finishing early
Whilst there is no obligation on the debtor or the Supervisor to pursue such claims, in my opinion large PPI charges added to loans should be scrutinised and enquiries made to see if there is a potential mis-selling claim.
Claims should be pursued through a properly regulated Claims Management Company who will charge a fee for their services. I don't see any problem with an IP firm having a separate department/company that processes such claims and charges a fee provided there is full disclosure and sanction by creditors. Indeed, it makes complete sense that they should be involved given their knowledge of the case and the requirement for any benefit to go to bona fide creditors rather than the debtor.
Regards
Andrew Bowers
Licensed Insolvency Practitoner
Hi Andrew -- what you say is correct. However, as you say, there should be complete transparency and the process should have been started at the beginning of the IVA and not sprung ( in a rather threatening manner) on the OP right at the end.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
