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Joshua
Joshua, Lawyer
Category: UK Law
Satisfied Customers: 25961
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I have received a cheque for a PPI payout from MBNA but I still

Resolved Question:

I have received a cheque for a PPI payout from MBNA but I still owe them an amount which I am paying off monthly to their solicitors. Can the solicitors tell MBNA to stop the cheque and divert the funds to pay off my debt. Bearing in mind that the cheque is for an insurance that should never have been paid as I am self employed.
Submitted: 5 years ago.
Category: UK Law
Expert:  Joshua replied 5 years ago.

Joshua :

Welcome to JustAnswer! If you've queries once you've read my answer do ask. When satisfied, please kindly click the Green ACCEPT button.

Joshua :

Are you in any form of IVA or debt management plan please?

Customer:

Yes we are in a debt management agreement with the recovery solicitors

Joshua :

Thanks. Is the debt more than the refund?

Customer:

No the debt is less than the refund

Joshua :

Thanks.

Joshua :

Finally from what you say MBNA have not sold the debt to a third party but are still collecting it themselves?

Customer:

The solicitors are collecting it on their behalf so I understand.

Joshua :

Thanks,. If MBNA had sold the debt on then they could not offset any payment. However if the debt is owed to them personally still they will have a contractual right to retain sufficient part of the refund by ay of set off against the debt owed. Usually this is a good thing in the long run as it will in your case mean that the debt as well as interest is paid. Obviously it reduces the amount of cash you will receive.

Joshua :

From what you say they have already sent you a cheque. It is possible for them to stop the cheque at any time before you bank it and it clears. If you are concerned that they do not do this consider banking it sooner rather than later.

Joshua :

Obviously if it clears, the debt would remain payable and they may seek to change the terms of that debt repaymen plan as a result.

Joshua :

Is there anything else I can help you with?

Joshua :

Can I help you with anything else?

Joshua :

If you have no further questions for now I should be very grateful if you would kindly remember to click ACCEPT in order that I am credited for my time.

Kind regards

Customer:

We have banked it already today and surely this is insurance money and nothing to do with the card. If they had not recommended this insurance in the first place or had paid out on the insurance when we hit hard times we would not be in this situation.

Joshua :

True enough but they have refunded you the payments and presumably interest so I do not quite follow your line of thought. Presumably you can use this payment to either repay the debt or choose not to and spend it on something else in which case the debt will remain owing until repaid. Are we at slight cross purposes?

Customer:

No we are not at cross purposes, the simple question is 'is it legal for them to stop the cheque at this stage'?

Joshua :

Yes normally they would have a contractual right to off set the refund against any debt owed to them or to any other company in part of the MBNA group. This being the case they could still stop the cheque though the chances are that they probably won't do this in time at this stage.

Joshua :

Is there anything I can clarify for you any further?

Joshua and other UK Law Specialists are ready to help you