Bank retaining refund after completion of IVA

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bobcatbike
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by bobcatbike » Tue May 15, 2018 10:47 pm
Hi - thanks in advance for your thoughts / answers about this.

I was a victim of the property crash and I subsequently lost my rental properties, my health and you could say my mind too - the banks were ferocious.

I had a Lump Sum IVA approved at a Creditors' Meeting in September 2012. I paid the lump sum (in full) immediately after the Creditors' Meeting. Due to admin my Certificate of Completion was only issued in April 2014.

I have received a letter from one of the mortgage companies:

"We are refunding some arrears management fees relating to your closed mortgage account......we've identified that some arrears may have been inappropriately charged to customers who fell behind on their mortgage payments. We are sorry about this, and to put this right we will be refunding all relevant mortgage arrears management fees charged to your account since 1 January 2009, together with the interest charged on those fees and any overpayments you have made."

"What you will receive: We will be making a payment of £.... to reduce the balance of the shortfall on your mortgage account which remained following the sale of your property."

(End of quotes from lender)

I respect that I defaulted and in an ideal world I wouldn't have done so. However, this lender, along with others, voted at a Creditors' Meeting to accept x% in the pound. My feeling would be that the payment I made via my Lump Sum IVA honoured the agreement between this creditor and me / my Insolvency Practitioner. To me, without wishing to sound greedy, any subsequent monies that this lender finds whether erroneously or not, should be refunded to me, given that my IVA agreement was honoured?

I would equate the bank's letter to..."Hi, remember you owed us money a few years ago. We agreed on a figure but we've now found some money belonging to you that you didn't know we'd taken. You kept to our agreement, but, now that we have your extra money...yes, I know we took it by accident...there's no way we're gonna let you have it back. We're not daft - we're a big banking institution and we've chosen what we're gonna do with your money with or without your approval. Don't waste your time challenging our decision - you lose!"

I'm sounding bitter, but very disappointed in the bank's approach to this given everything they put me through despite trying to facilitate them for a few years before having to go the IVA route. They've done this on 2 mortgage accounts that I know of so far.

Any advice on the legalities of their actions?

Many thanks.
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Foggy
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by Foggy » Wed May 16, 2018 6:53 am
As I mentioned in a similar thread the refund does belong to the former creditors, as decided in the courts recently. However, it does not belong to the one former creditor, but to all of them on a pro-rata basis. As for who would champion this cause I have no idea. IVA's as such are outside of the ombudsman's remit, but the refund itself is his to deal with. The question to ask, though, is : Do you want to fight ? Financial burdens almost overcame you before ... do you really need that again in your life?

As Merlin and Redboxtree both said in that thread, which I echo also: The past is past and we have extracated ourselves from the mess. I have no wish to revisit that part of my life.
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kallis3
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by kallis3 » Wed May 16, 2018 10:28 am
I also agree.
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bobcatbike
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by bobcatbike » Wed May 16, 2018 12:16 pm
Thanks to both of you for your replies. I suspected that protocol would akkow for retention, especially "However, it does not belong to the one former creditor, but to all of them on a pro-rata basis."

You're 100% correct on having to revisit the past - not worth it.

Thanks for clarifying.
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