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PPI claims after your IVA has finished

In March 2017, the Court of Appeal decision in the Green v Wright case was published: Mr Wright’s IVA firm was allowed to collect PPI after his IVA ended, even though he hadn’t consented to this before his completion certificate was issued.

As questions about this continue to arrive, I thought it would be useful to summarise the current situation: what is clear and what is less clear.

ppi after your ivaThe Court of Appeal decision

The full decision is here: Green v Wright verdict. Here are some articles on the decision by some of the lawyers that have been involved:

Before you read on:

I am not a lawyer and I can’t give you advice on what you should do. When I say things like “I cannot see” or “This seems very unlikely”, I could be wrong. I am giving a layman’s opinion, hoping it will help you to consider your own situation.

If there is a large amount of PPI, you may want professional advice. You can go to your local Citizens Advice or a Law Centre – that would be free – or you may prefer a solicitor with experience in personal insolvency. If you decide to go to court over this, you have to consider that if you lose you may have to pay not just your own legal costs but the other side’s as well.

Common misunderstandings

Here are some points that keep cropping up which are worth emphasising:

“My PPI was for a debt that wasn’t included in my IVA as it had been repaid”

This doesn’t make a difference. You had the right to reclaim PPI at the point your IVA started and it is this right which is an “asset” of your IVA even if you didn’t realise it.

“My IVA says that it includes windfall assets received whilst IVA is open, but it is now closed”

This is a standard clause in most IVAs but it isn’t relevant to the PPI issue. PPI is not being claimed as a windfall. PPI is being claimed for your creditors because the right to make a claim was an asset you owned at the start of your IVA, this has nothing to do with the windfall clause.

“They will try to get any money I inherit – this is never going to end!”

This isn’t going to happen. An inheritance (or lottery win, or taking money from your pension etc) is treated as windfall if it happens during your IVA. But after your IVA ends the money is yours if one of these events happens. The court case doesn’t relate to windfalls at all.

“I would have been better off going bankrupt”

That may be correct. But PPI isn’t relevant to this – if you had gone bankrupt all the PPI would have gone to the Official Receiver.

“It’s not fair because this wasn’t explained to me at the start”

When your IVA started no-one had any idea that this court case would happen. You can’t blame your IVA firm for not telling you something they weren’t aware of.

The simplest cases

“My IVA hasn’t finished yet”

If your IVA is still in progress then your IVA firm has the right to collect this PPI. If you refuse to co-operate with the claims company they appoint, you could be in breach of your IVA terms by refusing a reasonable request and your IVA may be failed.

“I have made my last payment but they won’t give me my completion certificate unless I agree to them collecting the PPI afterwards”

If you don’t sign they will keep your IVA open until they are happy they have collected all the PPI, which could be years. It’s your choice, but I can’t see any options which will let you get the PPI money.

“I had to sign documents authorising them to collect PPI before I got my completion certificate”

Many people in the last few years have been asked to sign a deed of assignment saying that any PPI paid after their IVA completed should go to their IVA firm. The Court of Appeal case doesn’t change this.

In any of the above situations, the PPI is going to your IVA firm, I can’t see anything sensible you can do to stop this and there isn’t much point in you reading the rest of this article.

Mr Wright’s IVA used R3 standard terms and conditions

The Appeal Court decision was that Mr Wright’s IVA created a trust which did not end with the completion of the IVA unless there was specific wording to state it ended. This wording wasn’t in Mr Wright’s completion certificate.

The Appeal Court decision was based on the specific terms and conditions of Mr Wright’s IVA, which in his case had used the R3 standard terms.

If you aren’t sure if your IVA used these terms, ask your IVA firm or dig out your IVA documents. If you see Produced by the Association of Business Recovery Professionals this is an R3 IVA. Anything that says Consumer IVA Protocol is not an R3 IVA.

Let’s look first at the situation if you have an R3 IVA, then at how this may change if you don’t.

For people with an R3 IVA

If your IVA used the R3 terms, you should assume the Appeal court decision applies to you. It is highly unlikely that your completion certificate would have had any wording to bring the IVA trust to an end. The same argument – that specific wording is needed to end the trust – is likely to apply even if your IVA completed with a full and final settlement or failed.

Claims which haven’t yet been paid out

If a PPI complaint is upheld, it is very likely that your bank will ask the IVA firm if they should have the money, the IVA firm will say Yes (because of the Court of Appeal decision) and the bank will pay it to them. If this happens there is very unlikely to be anything you can do to challenge this.

Thinking about some possible exceptions:

  • if your IVA is so old that your IVA firm can’t be located, I think the bank will eventually send you the money. See A PPI claim after an old failed IVA for details.
  • If your IVA is so old the firm no longer has enough records for it to be able to distribute IVA to your creditors, it may be happy for the money to come to you. If you have an old R3 IVA you could enquire about this.
  • If your creditors have been paid in full, the money should come to you. You are entitled to ask your IVA firm for an account which shows how much money has been distributed. If you are thinking you may be near the full payment point because a lot of PPI has already been reclaimed, don’t forget that a large proportion will have been taken by the claims firm and not gone to your creditors.

Will your IVA firm be trying to reopen old cases to reclaim the PPI? That is likely to depend on the firm. I have heard that some firms don’t intend to reopen these cases, but if you start the complaint, they will claim the PPI.

If your IVA firm wants to reopen your old case and asks you to sign something to allow them to reclaim the IVA, it isn’t clear that they have any sanctions against you if you refuse. If they mention the Green v Wright decision, you could ask them what will happen if you don’t sign.

You could also propose a solution in which you split any PPI reclaimed – half to you and half to the IVA firm. If your IVA firm agrees to this, you need to get it very clearly in writing. Also you do not want their claims firm making the complaint and taking a huge cut first – offer to make the complaint yourself.

PPI has already been paid to your IVA firm

There is nothing you can do about this.

PPI has already been paid to you

If you have spent the money, this is a very worrying situation. It seems unlikely that an IVA will be aggressive in this situation – who should it pursue, you or the bank who sent you the money? And if you don’t have any assets, it’s hard to see how pursuing you could produce any gain for the creditors. Don’t let yourself be pressured into doing anything silly like trying to borrow this money to hand to the IVA firm – just explain your situation.

For people with non R3 IVAs

There is no legal clarity for non-R3 IVAs. There hasn’t been a court decision on any of these cases and they can have very different terms. Some could be close to an R3 IVA in the areas that matter, but some may not be similar.

It seems unlikely this is going to change. It is hard to imagine a debtor is going to want to go to court, given the costs that Mr Wright has ended up with after losing his case.

In most respects similar points apply to those on the R3 case above, except the IVA firm itself is on less solid legal ground. You may decide that they are largely bluffing… but this still isn’t a very comfortable position for you to be in. If you feel you are being pressured unreasonably, put in a formal complaint to the firm and then to the IVA Complaints Gateway.

IVA firms may take different views.

  • Some may choose not to try to reclaim PPI after a completion certificate has been issued if no deed of assignment has been signed.
  • Some may try to reclaim, but it isn’t clear what possible sanctions they have if you refuse to co-operate. In 2018 and 2019 ClearDebt and Aperture have been sending out some letters that some customer feel are threatening about allowing the firms to make PPI and other financial claims for IVAs that have completed or have failed some time ago. See Aperture (previously called Grant Thornton) sending PPI letters after IVA completion for what your options are.
  • If you try to reclaim PPI, it seems pretty likely that the bank may pay it to your IVA firm.
  • Some firms may agree if you offer to split the PPI.
  • If PPI has been paid to the debtor and spent, again it seems unlikely that the IVA firm will pursue this aggressively.

Comments

You are welcome to comment below but I cannot guess what your IVA firm will choose to do and I am not going to speculate.

After the Appeal Court verdict in March 2017 this article was re-published with  up-to-date information.

Comments

  1. As previously stated I got my I.V.A. certificate in July 2014. We have been offered a retirement bungalow with the local council which means us selling our house. With this being in joint names have Aperture any legal claims to the money we make from the sale.

    Reply

  2. I completed my IVA 3 years ago, they did PPI claims for my individual debts, but my ex partner did not agree to PPI claim on our joint debts so they could not be claimed at that point which the IVA company agreed with. My ex partner has now asked about possible claims of PPI, I know I am unable to claim PPI on the debts included in my IVA as this will automatically go to my IVA/creditors (I am not sure how accurate this is but I also got told it would re-open my debts with creditors which I certainly do not want when I paid over £19,000 of a £25, 000 debt through my Iva). The thing I am unsure of is that my ex partner and I had 3 mortgages in our time together, the final one being paid off when we sold the property when we separated, and he asked about PPI for them, what I wondered is if I was to agree to this claim would the money go to the IVA/creditors despite my IVA completed 3 years ago ? Even if the debt wasnt included in the IVA and had previously been paid off?

    Reply

    • If PPI is claimed on debts that were in your IVA, any refund is normally used to repay those debts. It doesn’t “reopen” the debts – you won’t be chased for the rest – but you probably won’t see any money from it.

      If PPi is claimed on debts that were repaid before the start of your IVA it is likely (but not certain) your IVA firm will claim any refund. You could contact them to ask?

      Reply

      • I won a ppi whilst in the IVA on a mortgage I had with Nat West this mortgage was paid up and I won over £5000 but as I had a couple of loans that were with Nat West that was under the IVA,Nat West debt Recovery team held on to that money to off set and cleared one of my loans with them.
        I think it was unfair as the Mortgage was paid up years before my IVA it was not linked with my loans but they still took the money, it’s so sad that PPIs should be used to off set any debts specially if ur out of an IVA as this insurances added onto loan payments did not help people and in cases caused us to be in debt and end up in IVAs.
        The banks never loss out even through the IVA the government compensates them !!!

        Reply

  3. Interesting read. Although I don’t have any PPI (as far as I know), Is there a defined period Iva trusts have in which they should attempt to complete their investigations concerning items such as PPI? Otherwise they could drag their feet and keep this going on for years and years. All this time they are retaining personal financial records, surely without a fixed period of time this contravenes GDPR?

    Reply

    • PPI complaints are ending in August this year. You are not going to win a complaint about this.

      Reply

  4. Hi,

    I received my completion certificate in Aug 2016, but have just been contacted by WageDayAdvance representatives starting I am due some Redress. I hadn’t started the claim, until they asked me to submit the claim today. If i do receive this, would my IVA expect the money to go to them? And would it automatically be paid to them?

    Reply

  5. My husband and I were in an IVA 12 years ago. We paid into the IVA for over two years when I was diagnosed with aggressive cancer. The creditors voted to close the IVA as there was no clear prognosis and I wasn’t working. We received a Certificate of Satisfaction and the creditors were paid out although it was a much lesser amount. One of our creditors was the Northern Rock. We have just been notified by a company dealing with PPI enquiries that my husband and I are entitled to a return of premium from Northern Rock. We also claimed from the Halifax some years ago. The Halifax sent the monies direct to us (they were also one of our creditors). Northern Road have said that they are keeping the funds towards our IVA. Can they do this? If we have received a Certificate of Satisfaction 9 years ago stating the IVA was settled who can this be fair. This has nothing to do with the fact that they mis-sold us PPI. Please advise.

    Reply

  6. I’ve just made the final payment and my IVA company is holding my certificate until I sign an agreement for them to investigate all my PPI. The thing is the IVA company has already investigated my PPI claims while I was in the IVA. They took approximately £3500. I didn’t see a penny of course. Now why are they asking to do another investigation?

    Reply

    • This argument isn’t going to get you anywhere. They are entitled to refuse to complete your IVA unless you agree. I understand it’s annoying, but the choice is yours.

      Reply

  7. In 2016.I was adviced seek advice from citizens advice which said i was in no financial state to pay my ctax arrears over £4,500 and my advice centre said my only option was iva so i took there advice was discharged in 2017 and i made a claim 2019 for ppi and was awared over £3000 but the bank that awarded me sent it straight to iva and as I was in debt for ctax £4.500 and nothing due to any banks or estates only small high interest rates businesses e.g. provident all under £9000 !the £3000 does not cover the ctax and is more than all the small businesses e.g. provident so why have they taken this £3000 I was awarded ? The company that got me ppi sent me an email and letter saying great news u v been awarded £3000 then I called them as i never got nothing they called the bank who said it’s sent to iva but I was discharged 2017

    Reply

    • Are you sure you had an IVA? If you were “discharged” after a year, this sounds more like bankruptcy or a Debt Relief Order?

      Reply

  8. I was in an IVA which finished December 2018 I claimed ppi while in the iva and was awarded £3500 this was paid to the IP and into the iva .

    Can I now claim this back from the IP

    Reply

  9. Hi,
    I have completed my 6 years IVA on march 2018 and my certificate was issued on october 2018 from aperture. I have started my iva with DFD but later on they moved it to aperture. on my certificate following wording was written-
    “Dividends
    Creditors whose claims were outstanding or unsupported after the final claiming deadline, were excluded in full or part from
    the dividend distribution; however, they remain bound by the terms and conditions of the completed Arrangement(s). All
    dividends have been equalised where funds permitted.
    VAT and PPI
    The supervisor continues to deal with the PPI and VAT issues in accordance with the resolutions proposed and approved by
    your creditors at the meeting of creditors.”

    during my IVA DFD claimed PPI. last week i have received one letter from first dispute management saying they have been instructed by my aperture supervisor to investigate various mis-selling claims which may exist within my IVA and today received email from aperture whether i have received the letter or not. if i change address, they want to know my new address where they can resend that form.
    Can i ignore them? if i do can they reopen my iva? i have not received any ppi money from lenders personally, even i am not bothered. I really don’t want this hassle anymore. I am more than happy to complete my IVA.
    I would be really grateful to have your advice regarding this matter.
    Thank you

    Reply

    • “Can i ignore them? if i do can they reopen my iva?” It isn’t really clear what will happen if you try this. But to be honest it could be more hassle than just letting them get on with seeing if they can reclaim stuff. If you are asked about mis-selling and you don’t remember much, just say this.

      Reply

  10. Aren’t we entitled to receive the 8% statutory interest part of any refund? I’m sure when I was forced to sign the forms (2013), in order to get the completion certificate from my IVA which ended in 2012 (Grant Thornton), the carrot was that I would receive the 8% stat interest. Needless to say, I’ve not received anything.

    Reply

    • It isn’t a general rule, no. but if you were offered that, send Aperture (GT changed their name) a complaint and ask why you haven’t been paid it.

      Reply

  11. I have had a ppi claim upheld by NRAM but they will not pay out the redress as I have been in an IVA.
    I have a completion certificate for The IVA which finished 5 years ago.
    They have stated whilst the claim has been upheld I have no legal claim to the redress. But if the trustees contact them they will forward any monies owed to them.
    Is this correct as the IVA is complete. And as far as I am aware the insolvancy practitioner no longer exists

    Reply

  12. Hi, My IVA was completed in December 2016 and I recieved a small cheque for fund not collected by the creditors. I applied for PPI and two of the creditors have paid the money to the IVA company. Thing is I was with Debt Free Direct and they were taken over by Aperture who haven’t responded to my emails. Can I get this money back?

    Reply

    • You can put in a written complaint to Aperture about their failure to respond to your emails. See https://apertureiva.com/legal/complaints-procedure and put COMPLAINT in the email subject line.

      You may not be able to get any of this money back (as the article above suggests) but you are entitled to a reply to your queries and also to a statement showing how much money has been distributed to your creditors. If Aperture cannot produce this because they do not have the details of your IVA, then all the PPI refunds should probably be coming to you.

      Reply

  13. My IVA failed in 2012, and I have a letter confirming they want nothing more to do with the IVA. I’ve since repaid all of my debts. I’ve today found out that a joint loan which was repaid in 2008 may have PPI. Will this go to Aperture if I claim?

    Reply

    • If all your creditors in the IVA have been repaid, I don’t think it should.

      Put the PPI claim in (don’t use a claims firm!) and at the same time write to Aperture with the details of your IVA and your repaid debts and ask them to confirm that they have no interest in any refunds you pay get.

      Reply

    • Thank you.

      They’ve already had over £6,000 of PPI from me, although only £1900 went to the creditors and they claimed the rest as their “fees” which I though was wrong (they held onto the money for 4 years before giving any to the creditors). When I queried this, they said they were still owed approximately £2,000 in fees for their work over 8 months! I’ve made direct payments to my creditors and now only have 3 left (smallish amounts) which if I receive this other PPI I will be clearing in full.

      I will write to them and ask them to respond within 1 month, otherwise I will assume they no longer have any interest as per their letter, and will keep any PPI monies.

      Reply

  14. The joint IVA I had with my husband completed in 2013. Sadly, my husband passed away in 2017. Today I had a letter addressed to us both from Aperture to sign a letter of Authority and for them to search for PPI with a questionnaire. I have been through a terrible time and had so much to cope and deal with ….find this very upsetting. Am I within my rights to just ignore this, please?

    Reply

    • Thank you. It has been so upsetting and bought back a lot of sad and distressing thoughts, they previously found PPI years ago now, and paid it to the IVA. I am trying to continue with my life and it is very difficult, even without being troubled by this.

      Reply

  15. I had one and ignored it. They took the majority of my PPI money so why should I give them permission to get them more money to keep !

    Reply

  16. My IVA was completed successfully in 2011 and I received a completion certificate very soon after that. My insolvency practitioner was Debt Free Direct (DFD). I received a PPI refund in 2015 and Lloyd’s bank tried to send the money to DFD, I kicked up a real fuss and DFD agreed to send the refund to me instead (result), they then sent me a letter stating that the trust was now closed and that any further refunds should be sent directly to me. DFD have been taken over by Aperture now and I’ve received another £3000 refund which apparently is going to be sent to my IP. I have a copy of the letter stating that the refund should come to me so my question is Should Aperture honour that as my file will show the trust closed or will they try to cling onto the money?. I will go to the ombudsman if I have to.

    Reply

    • If you have a letter from DFD saying that the trust is closed in your case, I suggest you send that to Aperture and ask them for confirmation that the PPI refund will come to you. If they refuse, put in a formal written complaint to them and if that is rejected take it to the next stage by putting in a complaint to the Insolvency Service gateway.

      Reply

  17. Hello
    I received similar letter from Aperture,
    We never signed the Deed of agreement aswedid not want this to go on for ever ! Dfd gave us our certificate of completion about three years ago and the IVA closed . While in the IVA were paid Ppi to the creditors .
    What can we do to end the trust as we have ever allowed / signed any documents to allowed this to carry on after ? It will never end ?
    Also the is a bit about they knows our income tax and think we should act to get mo ru for them to receive?! Are they allowed to ask for a tax rebate ?
    What is going on ?
    Totally traumatized as I thought all this was over and I am to worried to contact them .

    Reply

  18. Hi I took out an iva many years ago with debt free direct. It ended approx 6 years ago. My querie is that debt free direct went into administration and then aperture took them over. So with regards to ppi and any agreements that debt free direct made me sign regarding ppi – ie all funds to go to them. Is it still a legall form as did are no longer a company ? And can aperture still enforce this ?

    Thanks 😀

    Reply

      • Thanks Sara I have emailed them to try and find out after being on the phone all afternoon from pillar to post – everything I had signed was with dfd I have never dealt with aperture – in fact I only found out about dfd going into administration a few days ago! I will let you know how I get on 😀

        Reply

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