Can I reclaim PPI while on an IVA?

This page contains information about debt solutions available in England, Wales and Northern Ireland. Debt advice in Scotland involves similar but different solutions. Before considering an IVA as a debt solution, please make sure you fully understand the risks involved. Please visit our website for more information about how to get an IVA.
Since we published this we’ve also written an article on Reclaiming PPI for free. If you’re on an IVA and want to reclaim mis-sold PPI it’s worth reading the article below and the one linked above.

Can I reclaim PPI?

To reclaim or not to reclaim PPI when you’re on an IVA??

Payment Protection Insurance (PPI) has been in the news a lot recently and many people are taking the time to check and see if they had been mis-sold any policies for financial products in the past.
PPI was sold on the basis that it would cover loan or credit repayments when people fell ill or lost their jobs. In many cases this has been found out to be false and misleading. Some customers were sold policies with PPI without their knowledge.


Many of our IVA clients believe that they can’t reclaim PPI on any mis-sold policies because they’re in a legally binding arrangement with their creditors. This isn’t correct. The fact is that if you have been genuinely mis-sold a credit card or personal loan then you do have the right to reclaim PPI from creditors when you’re on an IVA.

How do you reclaim PPI?

You might be aware of TV and radio advertisements by companies offering to help with reclaiming PPI on your behalf. You might have even received a spam text message or phone call from a company offering their help. It’s important to remember that such companies charge a fee for reclaiming PPI on your behalf.

The most important thing to remember is that you don’t need to use a claims management company to reclaim PPI. Using a PPI claims management company could cause a big headache if you’re already in a debt solution, such as an IVA.

The best way of reclaiming PPI is to use this easy-to-follow PPI claims guide from Martin Lewis of MoneySavingExpert.com fame. The step-by-step instructions are simple to follow and more importantly, they are proven to work. You will find it possible to make claims for PPI without using a reclaim company.

What do the StepChange team who manage IVAs do when you reclaim PPI?

Up to you to decide whether reclaiming PPI is best for you. Should your PPI claim prove successful you need to keep us informed about what your creditors intend to do with the compensation payment.

Each creditor treats the people who owe money to them reclaiming PPI differently. Some creditors may reduce the money you owe them by offsetting the PPI payment from the amount you owe them. This way your debt to that particular creditor will be reduced in your IVA.

Other creditors may refund the PPI claim money to you directly. Under the terms and conditions of your IVA you need to inform us immediately if you have receive money from reclaiming PPI.

Why do you need to tell us you’ve had a PPI payment?

Unless your PPI reclaim is strictly not in your IVA agreement you would have to send any money you get to your IVA supervisor. This is so all creditors you’re paying through your IVA are aware.

If you’re not sure if you ever had PPI then it’s worth following the instructions to find out. Some people who did take PPI were not aware at the time that they had signed up for it when they took out a credit card, personal loan, or other financial product. This is one of the reasons why banks are repaying the money to some customers.

If you get a large amount of money by reclaiming PPI you could ask your IP to make offers to your creditors. Even if it doesn’t cover the total included in your IVA your creditors may be willing to accept. By settling your debts this way, your IVA could end early. There is no guarantee that your creditors will agree to this, but they will take all your circumstances into consideration. It could help you to get debt free sooner.

While we make every endeavour to keep your IVA on track, please be aware that failure of an IVA may lead to your creditors petitioning for your bankruptcy. If you own your own home, please also be aware that you may need to release equity in order to pay off your debts, and remortgaging may attract higher interest rates. Your IVA may be extended for a year if remortgaging is not an option.

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