Using PPI to pay off IVA?

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chloe
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by chloe » Fri Nov 09, 2018 3:38 pm
I am 4 and half years into my IVA, a total of £3500 or there about left to pay on my IVA. I have just recently found out I will have a PPI Payout of about £5500. Can I pay my IVA off to finish early?
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Foggy
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by Foggy » Fri Nov 09, 2018 3:53 pm
No -- the PPI will go towards your total original debt, not pay off IVA payments. The payments will remain as agreed.
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chloe
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by chloe » Fri Nov 09, 2018 4:36 pm
I have 3500 left of the original debt. So why would the PPI refund not be used to pay that off?
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Foggy
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by Foggy » Fri Nov 09, 2018 4:40 pm
In your original posy you said £3500 left to pay -- I assumed you ment in IVA payments, not the balance of the full original debt. Where have you got this balance figure from ? While in an IVA you continue until the agreed term ends or, if it happens sooner, you have paid the full original debt, plus fees and statutory interest. If the figure you quoted includes those, then it will finish earlier and you will get some back.
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chloe
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by chloe » Fri Nov 09, 2018 5:02 pm
I asked the IVA company and they informed me of what I had left on the original debt.
They have just said they don’t know how much their fees and statutory interest I will have to pay once I pay the creditors off.
In the long run then can you pay more then your original debt?
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Foggy
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by Foggy » Fri Nov 09, 2018 5:05 pm
chloe wrote:
I asked the IVA company and they informed me of what I had left on the original debt.
They have just said they don’t know how much their fees and statutory interest I will have to pay once I pay the creditors off.
In the long run then can you pay more then your original debt?


You can do, if you ignore the interest the original debt would be accruing over the term. In most cases, paying the debt, fees and statutory interest would come in at less than the debt and contractual interest. However only a very small proportion of people get to that point.
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kallis3
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by kallis3 » Sat Nov 10, 2018 11:36 am
I agree with Foggy - just check that it is the full amount owed on your total debts and not your IVA figure.
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chloe
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by chloe » Sat Nov 10, 2018 12:33 pm
What do u mean by the IVA figure?
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Foggy
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by Foggy » Sat Nov 10, 2018 1:08 pm
chloe wrote:
What do u mean by the IVA figure?



By "IVA figure" Kallis means the amount you have agreed to pay during the IVA. Many people with, say, a debt of £60,000 have agreed to pay, over the term of the IVA, a total of, say, £20,000 .... and they then say "I owe £20,000" .... but .. no ... they still owe £60,000. Only when the IVA finishes and they have paid the agreed £20,000 will they be "let off" the rest of the debt.
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kallis3
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by kallis3 » Sat Nov 10, 2018 2:53 pm
Sorry - did not word my reply properly.
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chloe
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by chloe » Sat Nov 10, 2018 9:15 pm
Oh I see what you mean.

Yes my original debt was £15,111
I’ve paid £11,321 so far into IVA.

But I’m confused because at one stage I was paying £537 a month. But if I did continue to pay that surely I would have finished before 5 years?

I have asked for them to send me a copy of my IVA proposal.
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Foggy
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by Foggy » Sat Nov 10, 2018 9:39 pm
On a debt of £15k you would be looking at paying in a total of around £18.5k to cover debt and fees plus around £8 k in interest, if this has not been excluded (it sometimes is) So the IVA will stop if you hit around £26.5k before the end.
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Radish
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by Radish » Sun Nov 11, 2018 11:10 am
I was in a similar situation to you, I received £5.5k in PPI too. This was from one of my creditors (who I owed money too) and they paid it straight into the pot without sending it to me first. I owed £19k at the start of my IVA, I had already paid £18 back at this point and had three payments of £300 to make. When this took the pot to £23.5, I assumed I wouldn't have to make the last three payments, but I was told I must! that I have no choice, of it will be a failed IVA and I will then be liable for all of the lost interest and fee's. Its the rules, weather or not we like them is another thing.
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