The reason why Claims management companies will not do PPI Compensation Claims if your are in an IVA

Technically the answer to this is YES however there is a big BUT that you should know about.

When you enter into an IVA  (Individual Voluntary Arrangement) you would have had to do an income and outgoings statement to see what your current disposable income is. The lenders will then agree to monthly payments over 5 years based on this disposable income. The lenders will then calculate how much of your debt would be repaid over this 5 year period and then wipe out the remainder of the debt (upto 75%) on the face of it this is great, you get debt free in 5 years and may only pay back 25% of the original debt.

The problem with this is that any income you recieve over and above your stated disposable income would be taken by the lenders. So if you get a full refund for your Payment Protection Insurance this will be taken up by your IVA agreement and you will not see any money.

Therefore most Claims management companies will take on customers who have an IVA as the customer will never see any money and would then be burdened with an Invoice from the Claims company that the customer would struggle to pay.

This is an unfortunate situation as the PPI may have been one of the causes that got the customer into financial difficulty as it would have made the Loan payments more expensive in the first place. We have spoken to many IVA companies about this situation and there is not a pratical solution at present.

The customer can always do the claim for a refund themselves and this would reduce their debt but most customers just don't have the stomach for another fight with lenders after going through the IVA process and never bother.

I will post an update when and if we get a workable solution for this.