www.iva.co.uk

Hello just a question about a payday loan refund that is being paid following the FOS decision to uphold my complaint made. My IVA completed this year and my IVA company have said they have an interest in any refund I may receive. The loan was taken out in 2011 whilst in my IVA. I was allowed credit under £500 at the time.my question was does the IVA company still have the right to take the full refund or just 50% ?

As an asset of the IVA they are entitled to all of it -- the 50% shares only apply to earned income.

Hi,

Totally agree - it is an asset and all will be payable across to the creditors.

This is just a laymans view but hasn't this money already been assessed as it came out of the op's income during the iva? If they get a refund of the interest paid it would not create extra income or 'new' money, I have no idea how this works in practice but that is what I would argue.

It probably hasn't been assessed as it wouldn't have been known about at the time.

Hello, I think it was known about as it came out of the op's overall income which their Iva company would be aware of as part of the I&E process. For me it would be like losing £500 and when you find it again the company claiming you now have an extra £500, I don't see any financial gain here as a refund of interest is supposed to create a situation where it is as if the loan never happened.

My own PPI wasn't known about at the time of the IVA - ok it was only a nominal amount and I wasn't bothered about it at all.

I think we are going to have to agree to disagree on this one.

You could look at it either way -- yes, there is an arguement to liken it to "savings" ... the OP had put away a few quid each month and is now drawing it out. On the other side of the coin you could say that the valuable painting hanging in the hallway was paid for with "old money", before the IVA, but this is an asset. At the end of the day if you have an asset or a surplus it is morally right to pay your debts with it. Of course this is further complicated by the fact that the IVA has been and gone and the debts written off. But, at the end of the day the refund can be treated as an asset and it is down to the IP. I know some firms would take the first route described above, but there are others who would take the second.

Surely when a IVA completes and the PPI authority is in play to claim back any PPI any other refund would not classed as declarable? I would not have though after an IVA completes and all monies are signed off an IVA company would still be entitled to this? There has to be a line drawn in the sand otherwise a former IVA customer can never be fully free? what can they do if a customer refuses to hand over the refund?

Have to disagree - it is an asset due to the creditors. They can take whatever steps they need to recover the money.

Hmc wrote:

Surely when a IVA completes and the PPI authority is in play to claim back any PPI any other refund would not classed as declarable? I would not have though after an IVA completes and all monies are signed off an IVA company would still be entitled to this? There has to be a line drawn in the sand otherwise a former IVA customer can never be fully free? what can they do if a customer refuses to hand over the refund?

Before PPI hit the fan it was always the case that any assets that come to light after the IVA, but were in existence during the IVA belonged to the IVA estate under a trust created by the IVA. To facilitate dealing with PPI the deeds of Assignment are being used these days -- these usually refer to "PPI and similar refunds", but even if not mentioned in as assignment, as asset is still captured by the trust.

This isn't a ppi refund the op is asking about as far as I can see, it is a refund of interest paid on a payday loan which he took out whilst in an IVA. I assume he has complained to the fos that this was irresponsible lending who upheld the complaint and ruled the interest paid should be refunded.
As the loan/s were taken whilst he was in an IVA I assume the money used to service the debt was from money allowed for living expenses, bills etc so it was already agreed that the money was his to spend. I don't see why this should change if it is refunded

Oops; Just realised everyone is aware this is not ppi - Sorry, ignore the first bit