Brits in Individual Voluntary Arrangements (IVAs) are finding that even after they have spent five years repaying their debt through the binding debt repayment approach they are still stuck in the IVA and can’t get out.
As part of the IVA process in the UK, consumers are told they must file a claim for overpayments of payment protection insurance (PPI) before they are officially allowed out of the IVA.
With a giant backlog of PPI claims in the works, some are saying it can take up to an additional twelve months after all creditor payments are made to hear back on the PPI claim and be set free from the IVA.
People are being told they must file PPI claims even when they had no payment protection insurance on their lines of credit.
Andy Davie of IVA.co.uk said, “People who are coming to the end of their IVAs are having to wait on completion because of the PPI reclaims.
They are having to agree to the PPI refund process even if they swear blind that they never took out PPI.
An IVA can be a very hard solution, with all of your disposable income paid into it for five to six years.
Claims for overpaid PPI have been a big deal. With £10 billion set aside for claims, the money is waiting for those that have valid claims.
The big complaint with the way PPI was sold was many people were sold payment protection insurance when they were ineligible to receive any benefit from it.
It is estimated that 20,000 of the 30,000 people a year taking out IVAs have been made to deal with filing PPI claims and then sitting through a delay.