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.
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?

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 in the past.

PPI was sold with the understanding that it would cover borrowers’ loan repayments if they fell ill or lost their jobs. In many cases this has been found out to be false and mis-leading, and some customers were sold policies without their knowledge.


Many of our IVA clients believe that they can’t reclaim any mis-sold policies because they’re in a legally binding arrangement with their creditors. The fact is that if you have been genuinely mis-sold a policy then you do have the right to reclaim from creditors.

How does it work?

You might be aware of TV and radio advertisements by companies offering to reclaim 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 this service.

The most important thing to remember is that you don’t need to use a claims management company to reclaim mis-sold PPI. From our experience using a claims management company could cause a big headache if you’re already in a debt solution.

The best way to claim mis-sold PPI is to use this easy-to-follow PPI 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.

What does StepChangeVA do with PPI reclaims?

The option to reclaim is yours, should your claim prove successful you need to keep us informed of what your creditors intend to do.

Each creditor treats PPI claims differently. Some creditors may reduce the money owed to them by offsetting the PPI amount; this way your debt to that particular creditor will be reduced.

Other creditors may refund any PPI money to you directly by issuing a cheque. Under the terms and conditions of the IVA you need to inform us immediately if you have received this money.

Why would you need to do this?

Unless you have specifically excluded the PPI claim in your IVA agreement you would be required to send any money that you receive to your supervisor for the benefit of all creditors.

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 the product. This is one of the reasons why banks are repaying the money to some customers.

If you recover a large amount you could ask your IP to offer this to creditors in settlement of your debt so that your IVA could be finalised early.  There is no guarantee that your creditors will agree to this but they will take all your  circumstances into consideration and it could help you to get debt free sooner.

Do remember that if you do reclaim you must make your IVA company aware of any funds received. To not do so would breach the terms and conditions of your arrangement.

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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