Who gets what from PPI claim ? How much is eventually left for my creditors ?

[Gary.51]

I'm in an IVA with Payplan who has asked Credo Claims to handle any PPI claims I might have. Credo charges a 40% fee, which is a lot.

How much of this will they pay to Payplan as an Introducer Fee?

Isn't Payplan obliged to declare any introducer fees?

Isn't this fee supposed to be paid into the IVA as an asset of the estate?

Will Payplan then take a % of both the remaining PPI claim AND a % of the Introducer fee, as part of their normal Supervisory fees?

Where does all the cash from the claim actually fall to earth - who gets what, and how much is eventually left for my creditors?

[Foggy]

The claims company gets a cut of the claim and there is no introducer fee involved.

They usually get the agreed percentage of the whole refund, so, for ease of maths, say the refund is £1000. In this case the claims company get £400.

So £600 is payable into the IVA estate, of which ( in most cases these days) the IP gets the agreed 15% - £90.

Of the original £1000 the creditors will see £510.

[Gary.51]

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

The claims company gets a cut of the claim and there is no introducer fee involved.

They usually get the agreed percentage of the whole refund, so, for ease of maths, say the refund is £1000. In this case the claims company get £400.

Thanks Foggy

Do you know for a fact that no introducer fee is involved?

Why would an IVA company choose a Claims company that charges 40% when there are plenty that charge 25% or less? (Suspicion: because they're getting a kickback from the Claims company)

That aside, I now understand Credo Claims and Payplan have strong ties - a shareholder of Payplan's parent (Totemic Ltd) is also a director in Credo. Another reason for choosing the more expensive company at cost to my creditors!

[relieved33]

Try not to get hung up on fees, as you say it's at a cost to your creditors. If they want to challenge it, they will.

[Foggy]

Gary --- if an introducer fee is paid the IP HAS to declare this in the accounts -- at risk of losing his licence to practice.

You have probably hit the nail on the head when you mention that these high fee charging claims firms are often closely linked with the IP firm. However, that is a matter for the creditors to challenge as it is they who agree these fees, not us.

[Gary.51]

Are IPs banned from accepting introducer fees then?

[Foggy]

Not banned -- but if paid they are supposed to be accounted for and, I believe, are part of the IVA estate.

[Gary.51]

The whole business stinks if you ask me.

Looking round this forum, claims companies like EIF and EIC (who are NOT linked to any specific IVA firms) are charging up to 40% to handle PPI claims.

The Insolvency Practitioners Association allows commissions to be received for PPI introductions so long as they are disclosed and treated as an asset of the estate: http://www.insolvency-practitioners.org ... _final.pdf

40% fees hurt IVA Creditors and Debtors, because less money is left to reduce debts. The biggest winners are the claim companies and the IP firms who divvy up the 40% fee between them.

The IP firm then takes a further cut for its role in distributing assets.

Why are creditors allowing this? Why are regulators not clamping down on it?

[Foggy]

Gary, try not to let this give you ulcers

You ask why the creditors are content to part with 40% of the PPI fee --- by the same token we could ask why the creditors are content to write off half our debts to them.

Ask not why, but be grateful they do.

[Gary.51]

Foggy, the creditors are happy to write off 50% of our debts, because 50% of something is better than 100% of nothing.

But forget the creditors' motivations - the poor old debtors (like me) suffer when 40% is taken from our PPI refunds, because less cash is then available to reduce our outstanding debt.

I could settle my IVA more quickly if Payplan only allowed Credo Claims (or another CMC) to charge 25% - the market rate for the job.

I notice Payplan used to comment regularly on this forum, but I guess their current business model (with Credo) has pushed them to the moral low-ground now - anyone from Payplan wish to comment and prove me wrong?

Anyone else experiencing 40% fees on their PPI claims?

[Foggy]

Are you paying 100% of your original debt plus fees and statutory interest ? THEN it could have a direct impact on you and until then the IVA term will not be reduced.

The most often mentioned fees are around 35%. To my mind even 25% would be exhorbitant for something you can do yourself for a few stamps --- but then .... it's not my money !

[Gary.51]

No, I'm paying more like 55% of my original debt.

Are you saying that my PPI claim has no impact on my IVA, because however much goes to my creditors, it's treated as a windfall effectively?

So, I pay £325 a month for 60 months, into my IVA WITHOUT a PPI claim.

Credo wins my PPI claim, let's say £3,000. £1800 (60%), minus Payplan's cut, is distributed to my creditors. I get nothing directly, and still pay £325 a month for 60 months?

[lifenoteasy]

Yep - best idea is treat it as totally irrelevant to you and only relevant to the IP unless it puts you over full repayment of debts plus interest etc.

My thoughts on PPI are not really repeatable.

[Foggy]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Gary.51

No, I'm paying more like 55% of my original debt.

Are you saying that my PPI claim has no impact on my IVA, because however much goes to my creditors, it's treated as a windfall effectively?

So, I pay £325 a month for 60 months, into my IVA WITHOUT a PPI claim.

Credo wins my PPI claim, let's say £3,000. £1800 (60%), minus Payplan's cut, is distributed to my creditors. I get nothing directly, and still pay £325 a month for 60 months?

Yes, Gary, that is exactly the position. The object of an IVA is to pay back as much as is affordably possible. You have expenditure agreed -- what's left is the IVA payment ... if this is increased through overtime, bonus payments and the like, 50% goes to the IVA. If you win the lottery, get an inheritance a tax refund or PPI refund ( usually over £500) the lot goes into the IVA until you hit that 100% plus fees and interest.