PPI going to creditors as a top up ? Is this illegal ?

[maxieboy]

I am 12 months away from final payment after 4 yrs so far.I have surprisingly had 2 PPI cheques sent to me total being 10 thousand pounds. i SENT THESE TO MY IVA people. I had hoped this amount would go towards my final amount owed. But was told yesterday NO. it just goes to creditors as a top up !!! i was then also told that after the 6th year of payments or equity given from my home, the creditors will and can still hassle me for monie owed even though the total sum of debts will be paid by then.is this illegal or has the IVA got it wrong ?

[kallis3]

Hi,

Any PPI will go towards the full amount of your original debt but anything after that would be yours.

If you don't settle in full (plus fees and possible statutory interest) then any PPI after that is deemed an asset and will go towards your IVA even if you have completed.

[maxieboy]

Cambridge Mcduffy say different....but thanks for your answer.

[kallis3]

Once you have completed then they are entitled to PPI up to the full amount of your original debt - it is classed as an asset.

Hopefully Lisa Thomas will be back on to advise.

As regards a 'top up' it will go towards your total debt as far as I am aware.

[Foggy]

There is possibly some confusion as to terminology here.

Under an IVA you contract to make, say, 60 payments. After these any remaining debt will be written off.

PPI refunds do not go towards these payments, but are used to increase the total you manage to repay towards your debt. IF the total amount paid in ( by any means) hits the figure equating to the FULL ORIGINAL DEBT, plus fees and statutory interest, then the IVA will stop and any surplus over this figure is yours to keep.

The repayments you make towards your debt is not limited by the agreed repayments under the IVA, as you always owe the full original debt (plus fees and possible statutory interest) until the end of the agreed term.