Home Economics: Sinead Ryan answers your property questions
Q: I am applying to the Insolvency Service for a debt deal (PIA) on my mortgage and other loans. The PIP (Personal Insolvency Practitioner) I have initially engaged with seems confident that a deal can be done.
However, some time in the next year or so I am expecting an inheritance from my mother who has a terminal illness. Must I disclose this or can I put it in trust for my kids and bypass the bank?
A: The Personal Insolvency Act states that a debtor who is the subject of a PIA has an obligation to inform a PIP of any material change in their circumstances which would affect their ability to make repayments under a PIA.
Tom Murray, PIP with Friel Stafford says: "Apart from a token gift, an inheritance would be 'material'. In these circumstances it is likely a variation of the PIA will be made – i.e. increasing the amount available for the creditors. You wouldn't be required to make a payment greater than 50pc of the value of the property acquired through inheritance, unless the receipt of the property has been anticipated by the terms of the PIA.
"An insolvent individual cannot put an inheritance in a trust once he receives it. If he inherits prior to entering into a PIA it may be a fraudulent disposition of an asset if he placed the inheritance into a trust, and if he does it after entering into a PIA he will be in breach of the Personal Insolvency Act and the general requirements it makes on debtors."
However, he does offer an option for your mother. "If she decided to change her will now, and place the inheritance into a trust, then the inheritance would be fully protected."
Q: I got a letter from AIB offering me a refund on a PPI policy. However, it also asks me to continue paying the policy. What am I missing? I'm either eligible for it or I'm not.
A: You have sent me the letter which I believe is unnecessarily confusing. Although you may be eligible for a PPI, it may not have been a suitable product for you. Many PPIs were mis-sold and the Central Bank is forcing banks to make refunds in these cases, which they are doing, and reassess eligibility in all cases.
The bank told me: "AIB is conducting a full review of the sale of its PPI products. Some customers included in this review were eligible to purchase and claim on the PPI policy, however the sale may not have been carried out in accordance with rules set out by the Central Bank. The Central Bank has instructed that where the customer was eligible to purchase and claim on the PPI policy they should be offered the option to retain the policy and waive the refund should they wish."
So, it seems that you can take the refund, but if you prefer, you may still be eligible to keep the policy going. I suggest you get a written guarantee that the PPI will pay out under a claim should you decide to retain it.