Waiting for PPI compensation is trapping some people in an IVA debt solution who should have been discharged a lot sooner.
According to a report in the Daily Mail a couple from Northamptonshire have been unable to re-mortgage due to still being in an IVA. The IVA was supposed to finish 2 years ago but the insolvency practitioner is still waiting for PPI compensation to be awarded from three companies.
The problem occurs when the insolvency practitioner, who is legally obligated to recoup money for the creditors using inheritance, income, winnings and mis-sold PPI money, is unable to gather in all money available from an Estate.
The insolvency practitioner is not legally allowed to release anyone from the IVA while they are still waiting for the PPI compensation,which is causing unrest with people wanting to put their debt problems behind them.
Some insolvency companies will get a fee from organisations which re-claim the PPI on behalf of the person in the IVA. This should mean they want to get the PPI claimed back quickly, however this isn’t always possible.
Claiming PPI in IVA
One option being discussed to speed up the process of claiming back PPI is to introduce a “deed of assignment”, releasing a debtor’s claim to the PPI.
This is just one of many plans being considered by regulators to help close IVA cases, which last longer than 6 months beyond the point they were supposed to finish.
An Insolvency Service spokesman said:
“After we raised concerns with regulators they agreed to take forward for investigation all cases where the delay in closing the IVA exceeds six months from the debtor’s final payment.”
How PPI Should Be Claimed In An IVA
In an ideal IVA the PPI should be claimed back near the end of the debt solution by the insolvency practitioner, with any money going towards paying debts and IVA fees.
The PPI claim shouldn’t take any longer than 6 months, however both the insolvency practitioner and regulators currently have no powers to set a time.
If you’re having problems with your IVA or claiming back PPI, please contact Debt Support Trust on 0800 085 0226 to get debt advice from a charity.