There must be a cut off? I get the 'all asset' wording but if what Michael is saying is true then the debtor will never truely be rid of their obligations?
Andy.
I am pretty sure the same applies to bankruptcy because again the asset existed at the time of the bankruptcy.
Clare.
The debtor is free of their obligations and once their IVA or bankruptcy is over they have no liability to the debts nor the IVA. However, this does not mean that they can then start to reclaim PPI and keep it.
The right to reclaim the PPI belongs to the IP or Trustee and not the debtor. The debtor has no obligation to work with either post discharge but nor can they try and reclaim something that does not belong to them. If they do they money will rightly be paid back to those who are entitled to it.
However, if the PPI was mis-sold and the debtor had previously paid the loan in full pre IVA then the PPI win belongs to the debtor as they paid it in full, not the IP, trustee or the creditor! The debtor in this case should be the beneficiary of the win.
Andy and Clare.
My point is that the IVAs are completed and the debtors are debt free. However, they now cannot try and reclaim PPI that does not belong to them. If they just move on with their lives they will hear nothing from anyone but if they think they can get the PPI money back just because they have a completion certificate they are going to be in for a nasty shock.
If the debtors receive money 'out of the blue' from a bank and have made no claims for PPI this money should again be offered to the IP. Creditors could have written off a large percentage of the debts and it is only fair to give them what is theirs.
It is exactly the same in bankruptcy, as the PPI is a vested asset which has no effect by the discharge of a bankrupt.
I am not really seeing what the problem is here guys. If a full PPI audit is conducted well before a case is closed, there is no detriment to the debtor in the IP carrying out their duties to realise assets - so long as the debtor fully co-operates with that process - which is fairly simple and should not take any longer than three months. The current problem is a historical one, and relates to the legal ruling that PPI mis-selling was inappropriate and this gave rise the the number of late claims which are still being processed by IPs. IPS have been given clear direction now about how to close cases - and should be making every effort to do so as soon as they are able.
What I'm saying is.... if a loan was paid in full BEFORE the IVA and then the debtor reclaims PPI on this old historical loan post IVA, then any PPI refund should be paid to the debtor not the IP, Trustee or creditors as it was never originally part of the IVA anyway......
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by ClareSilver
However, if the PPI was mis-sold and the debtor had previously paid the loan in full pre IVA then the PPI win belongs to the debtor as they paid it in full, not the IP, trustee or the creditor! The debtor in this case should be the beneficiary of the win.
A case like this is actually a contributory factor to the insolvency and had the debtor not been missold PPI they may not have needed an IVA. Therefore those creditors within the IVA who supplemented the debtor's income shortfall as a result of the PPI misspelling are entitled to it's reclaim.
Loan taken out on 1991 for £10k with mis-sold PPI - paid in full by 1996 - never defaulted.
Fast forward to 2006 - debtor enters into an IVA with £25k on credit and store cards - unable to pay due to job cuts and had to take a lower paid job.
2011 IVA sucessfully completed and completion certificate received.
2012 - debtor makes a claim for mis-sold PPI on the loan which was taken out in 1991. Debtor wins and proves that PPI was mis-sold. How do you prove that this original loan taken out in 1991 was a contributory factor to the insolvency?
Mel,you mention that all IP'S have been given clear instruction in the closing of cases,could you expand on that.I am currently awaiting a MVM with the hope that a Cert Of Comp will then be issued,am I corect in thinking this will be the case or will there be further hurdles to navigate.(No PPI involved as far as I am concerned,disclaimer sent to IP as requested)
I'm interested to know what authority you are relying on Clare, given that you work for a claims management firm who are presumably giving advice to debtors in similar situations.
Whether the loan was paid off pre-IVA or included in the IVA has absolutely no relevance. We are talking about assets here which vest at the time the IVA is entered into at the end of the day.
Clare.
The fact that the debtor overpaid or was missold meant money was taken from the household budget. However, regardless the asset belongs to the IVA and must be paid to creditors.
Here is an extract from the technical manual which cleary states that a PPI Mis-selling complaint vests in the trustee even where loan has been re-paid prior to bankruptcy order.
As the PPI policy is a separate product to the debt it was obtained to protect, the right to compensation for mis-selling will vest in the trustee whether or not the loan has subsequently been repaid. This would apply even if the loan had been repaid in full prior to the bankruptcy order [note 9], although see paragraph 31.9A.22 below.
PJG Recovery have a free online advice channel at www.debtadvicetv.com. If you are ready to ask us for specific advice or help, then get in touch at www.pjgrecovery.com/contact-us.asp . I look forward to speaking to you.
I asked a simple question that is all. How do you prove in the example I have given that the original loan was a contributory factor to the insolvency? In this example it cannot be proved.
Where I work is of no relevance. I do not directly work within claims management either.
I have a related question related to chasing for house equity. Let's say that an IVA has an equity clause for £5k. At the time of completion, there is no equity available in the property and a VM is held which then agrees to exclude the property as an asset from the IVA as the equity cannot be realised. The CC is then issued along with a Final Report stating that the IVA is complete.
Under this rationale, does it not mean that if/when the property price raises in the future, that the 5k can become repayable as there is an asset included in the IVA initially (although later excluded) which has now become feasible?
If so, doesn't that mean that the person is NEVER truly out of the IVA? This is something that is very definitely not explained when you sign up for an IVA, - - most of them declared that you will be debt free and free of obligation after 5 years* (*in line with agreement) so wouldn't we have a case for being mis-sold IVAs in the same way as mis-sold PPI as the conditions were not fully documented (or clarified as being 'on-going' in certain cases) in the original agreements? After all, many of the 'mis-sold' PPI claims are down to terms not being explained properly, even though they are clarified in T&Cs, so what is different in these cases? Many people don't seem to be aware of the implications of on-going IVAs/assets etc.
Hope that makes sense!
Last edited by kittyface on Tue May 14, 2013 10:53 am, edited 1 time in total.
The variation meeting would have excluded the asset which was previously included. The client may have made an extra years payments in lieu of that equity but even if not the IVA is over.
The IP will remove the restriction and if the property is subsequently sold for a million pounds the IP or the IVA will have no claim and no knowledge.
