Can I reclaim PPI while on an IVA?

posted by in Living with debt

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 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.

Matthew worked as an IVA drafter prior to working in social media. In a former life he wrote scripts for Eastenders, Emmerdale and Hollyoaks. He has 3 chickens, 2 dogs and a rabbit.

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  • Andrew

    I’m in a iva 3rd year the compney I’m with have a sister compney , they said if I let them claim my ppi back it would come off my iva , so I did they claimed about 4000 back , but nothing came off my iva 🙁 don’t get it . Thinks I was ripped offf big time , ambulance chasers ?

    • Hi Andrew,

      As we mention in the blogpost, IVAs will usually have a windfall clause that says you must pay any unexpected lump sums into your IVA. If they have received a lump sum then the money should be distributed between your debts. It may be best to speak to your IVA company and ask for a breakdown of what money they have received and how they have used it (or how they intend to use it). If you are unhappy about how they have dealt with things then you could make a complaint to your IVA company. If you are still unhappy after they have looked into your complaint then your could refer it to the Financial Ombudsman service.

      Hope this helps.

  • Peter Taylor

    My IVA finished October 2011 but still havent recieved my completion letter which is now 1 year overdue. I keep ringing the company to see whats going on and they are saying they are trying to reclaim ppi from my debt. Surely this is wrong if my 5 year plan ended October last year. I just want the completion letter so i can move on.

  • Smudga

    I am just about to take out an IVA & looks like it will be accepted, I also have an ongoing insurance claim for a car accident form last year. Once this is settled will I have to give all of the money I recieve to my IVA, or is there anyway of keeping some if not all of the money?

    • Hi Smudga,

      It’ll depend on the circumstances and your Insolvency Practitioner (IP). It’s important to tell your IP about the claim and then they’ll be able to tell you how it will be treated.



  • AG

    I had an IVA but never finished paying it off. Had it for a year and then cancelled it. If I was misold PPI by my old bank do you think they would just keep the moneyl as it’s them that I owed the money to. They where the reason I got the IVA? I had a load, overdraft, and credit card with Bank of Scotland . Any advice would be appreciated.

    • Hi AG,

      I would suggest looking to reclaim your PPI and see what happens. It can vary how refunds are dealt with, sometimes the money is paid straight onto the debt the PPI related to, other times they give you it in cash. Either your debt will be reduced or you’ll get paid the cash (which you could then use to reduce debt), so it’s a win win in many ways.

      You mention that you’re no longer doing your IVA. If you’ve still got these debts it might be worth getting some fresh debt advice to have a look at your options. You can get a personal action plan in about 20 minutes by using our online tool, Debt Remedy.

      Kind regards


  • jacqui marshall

    have been in iva since 2010 blair endersby transferred us to grant thornton who despite us not missing a payment have failed us as agreement we had to pay 174 instead of 300 to blair endersby apparently wasnt official yet we never heard from grant thornton to say this only told they failed us as arrears were too much from fact they had us down to pay 300 yet never informed us we were in arrears still took 174 direct debit out every month. they are chasing us up to get ppi claims yet on our last letter from them they had already claimed a ppi back without our knowledge or consent. is this legal can we appeal with the financial ombusdman. some one please help xxx

    • Hi,

      If you have already had a PPI claim then you won’t be able to claim again. In the immediate term you could send a copy of your PPI confirmation letter to Grant Thornton. In regards to complaining to Blair Endersby the IP can claim PPI on your behalf but they should inform you.

      It’s probably best to complain in writing to the IP to give them a chance to reply. You can then contact The Insolvency Service to ask for clarification on grounds for a complaint. The IS give details of how to complain about a IP here

      Hope this is of help,


  • Gareth bevan

    I have been in an Ivan for 4 and a half years. Recently I had a successful ppi claim against a company that is not part of my ppi arrangement . Am I entitled to the money as it is not an asset and not a windfall in my opinion. I payed this money for many years before my iva started. Can you tell me if I am able to claim this money

    • Hi there,

      I recommend that you contact the insolvency practitioner that put your IVA in place regarding this as each IVA has its own terms and conditions when it comes to PPI claims. They will be able to advise you one what you need to do next.

      Best regards


  • Rich S

    I’m in my 4th year of my iva and have had a ppi settlement figure come in the post of £13,000 who would get the money me or the iva company

    • moneyaware

      Hi Rich,

      It would depend on your terms and conditions of your IVA. Most other people I’ve heard of in similar situations have had the money paid into their IVA or at least most of it.

      Your IVA supervisor should be able to give you a straight answer though.

      Kind regards


    • Stoddy.

      The iva company would get the cash and set it against your debts it’s usually the policy of the iva terms and conditions. it’s also very frustrating especially when your in financial difficulty and have turned to an iva then you get a nice big cheque only to be told it’s been handed over. i’d love to know if you did get the cheque and scoop it or the iva company.

  • Stoddy.

    I Have an iva with debt free direct and won £6000 from a black horse loan which is not attached to my iva as it is secured against my home.
    Black horse said that because i was in an iva they would contact them.
    So i contacted dfd and asked that because my ppi win was not part of the iva could i have it set against my current loan; The debt co said that they would agree to this so i contacted black horse.who told me they had sent the cheque to Dfd. so i contacted dfd who then said we can tell you that the cheque has not been received or cashed. this has been 7 weeks now so what do i do in this situation’
    Black horse gave me the cheque number and date cashed but Dfd say it has not been received

    I’m missing £6000 that’s floating about somewhere and don’t know what to do.

    • moneyaware

      Hi Stoddy,

      This sounds a bit odd – it’s probably a mixup more than anything. I’d suggest giving Debt Free Direct the details of the cheque that has been cashed, so they can track it down from their end.

      If you’re not happy with how Debt Free Direct are dealing with this then you can find out how to complain about an Insolvency Practitioner here:

      Kind regards


      • Stoddy.

        Thanks James.
        Got in touch with Dfd and will return my result when they get back to me with answers.

    • Stoddy.

      Just to fill you in on this situation i finally got through to debt free direct who then said they had actually received the £6000 from my PPi and it had been paid to my creditors so i got nothing albeit it did go towards my debts which i have accepted. but i do feel that debt free direct could have the decency to inform me how my iva is doing because i had a few debts and they are searching other accounts to see if i had PPi and the way i see it is that if lets just assume if i was to get perhaps £15000 back PPi from these people and if my debts only actually aquated to £12000 then i would have paid into my iva via PPi £21000 and if debt free are not informing me they got PPi from accounts then i could be being taken for a bit of a ride here. should they be telling me where they have distributed this PPi and the state of my Iva.

      • Hi.
        As long as your IVA is finished, You can actually get back all the money reclaimed from the ppi, It belongs to you and not the creditors!!
        If you need help claiming it back email me

  • illya hansford

    Hi could anyone help please I have an IVA which was ment to finish in 2012 but was told by my IVA which are Freeman Jones I had severl pay rises over the 5 years and still owed them £4767. Now I contacted them and with a lot of phone calls and paperwork sent them a breakdown of moneys I sent them and how much I was paying them which was £300 per month I could not manage with this high payment and borrowed from friends and family so paying them back and my IVA of £4767 cant do it they talked to my creditors and finalised a monthly payment of £100 over 12 months which finishes in April this year 2014 it was signed and agreed by all creditors and by Freeman Jones. I got in.
    touch with TSB about ppi and I was awarded £1970.74p back in Sept 2013 this payment was sent to Freeman Jones

  • moneyaware

    Hi there,

    It’s best to be honest and declare this income to your IP as you’re legally obliged to do so.

  • Stoddy.

    Hi All just to update regarding my issue with DFD and me asking them if i can have back the £6.503 to pay off a secured loan.

    Well after 12 months of emailing and communicating with DFD. they arranged a meeting with my creditors and after days waiting i got a reply with a decision in my favor. So i have been allowed the £6.503. back to pay my secured loan. they are going to transfer the money back to me. That’s a result. i would just like to add that i had to wait for DFD to find the money that black horse sent to DFD because although you get PPi payment back and you do get informed by your bank or whoever that you have been awarded PPi and it has been sent to DFD. on two occasions DFD had no recollection of any PPi i got awarded in my DFD account. So i suggest we should ask our DFD or iva provider if the money we got back from our loan company’s has been added to our account and distributed towards our creditors and perhaps our Iva reduced or cleared depending on the amount awarded and owed to creditors. This is two PPi awards I have been awarded and when told they had been paid to DFD i asked them and they said they had not got any PPi repayment to my account.
    Good Luck & Merry Christmas to all. i’m £6.503 Better off. 🙂

  • Hi.
    You can actually get back all the money reclaimed, It belongs to you and not the creditors!!
    If you need help claiming it back email me

  • Anna

    Hi Matthew, I had my Certificate of Completion on March 2015 and it stated my IP ceased to handle my account due to me being stated as completed it even shows that on my Credit report! Can I now gain any outstanding PPI’s due to me?

    • moneyaware

      Hi Anna,

      Thanks for your message. You’re able to apply for PPI whenever you like if you believe it was missold to you. However the issue is as to whether or not you’d receive the money or whether it’d be considered an asset under your IVA.

      If you’ve completed your IVA and have a Certificate of Completion to show that this is the case, then your Supervisor will no longer be ‘in office’ (because your IVA has finished). If your IVA was through us then we make no claim on the PPI after the IVA has been completed, however this might vary depending on who your IVA provider and the terms of your agreement with them.

      I hope this helps.

      Kind regards,