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    • debtinfo
    • By debtinfo 2nd Sep 11, 6:16 PM
    • 6,950Posts
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    debtinfo
    PPI Claims after bankruptcy
    • #1
    • 2nd Sep 11, 6:16 PM
    PPI Claims after bankruptcy 2nd Sep 11 at 6:16 PM
    Ok then PPI, (that is payment protection insurance) and bankruptcy, or more specifically reclaiming PPI and bankruptcy. Please note this is not about if you are eligible (in terms of if you have been miss-sold) as that is not my area and there is plenty of advice on that elsewhere, probably elsewhere on this site in fact. So for the purpose of this lets just assume that you have been miss-sold and that there is a potential to make a claim against a bank.

    It has been asked many times recently if you can reclaim the PPI on credit agreements if you have been made bankrupt, and more importantly for some people, whether you can keep any pay out.
    The first thing to understand is why a claim can be made in the first place. If it has been miss-sold to you then there has been damage caused to you estate (your finances) and so you had a right to take action in court to seek recompense. This is called a right of action. Next to look at is when this right came into being. It comes into being when you signed that contract where the miss-selling was done, from that point onwards the right or action (ROA) comes into being.

    Next is to see how that ROA interacts with bankruptcy, when you go bankrupt it is the default position that all of your assets transfer to the trustee of your bankruptcy unless there is a specific provision otherwise (for instance there is a specific position that you get to keep all your basic living goods). Now in the definition of what is an asset in bankruptcy it includes “Things in action”. An ROA is a “Thing in action” and therefore is an asset.

    So to summarise the ROA is an Asset and that asset is created when you signed the credit agreement. Being that in these instances the PPI claims we are talking about are all on credit agreements signed before the bankruptcy then these PPI claims are all assets and they all vest with the trustee of your bankruptcy.
    This means that not only do you not have the right to receive the monies from any claim but that you also do not have the right to make the claim, That right passed to the trustee and so it is the trustees right whether to take it forward or not, the claim now belongs to them.

    As far as I last heard the Insolvency service is trialling using a solicitors firm to take batches of these claims forward en masse to the banks and therefore if you have already made the claim and pocketed the cash there is a good chance that the IS will at some point try and cash in the claim and therefore realise that you already have. At that point they will have the option of recovering it from you.
Page 1
    • fermi
    • By fermi 2nd Sep 11, 6:23 PM
    • 39,229 Posts
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    fermi
    • #2
    • 2nd Sep 11, 6:23 PM
    • #2
    • 2nd Sep 11, 6:23 PM
    Insolvency Service/Official Receiver info - Payment protection insurance mis-selling claims and bankruptcy

    Payment protection insurance (PPI) mis-selling claims and bankruptcy
    PPI mis-selling guidelines

    Following the recent publication by the Financial Services Authority of proposed guidelines for firms that sold PPI policies and their contact with customers who may have been mis-sold a policy, but have yet to complain, the following information may be useful to persons who became bankrupt after the sale of a PPI policy.

    A PPI mis-selling claim: a bankruptcy asset

    Following provisions of the Insolvency Act 1986, The Insolvency Service takes the view that if a PPI policy was mis-sold before the date of an individual’s bankruptcy, any claim relating to the alleged mis-selling of the policy is owned by the official receiver or trustee of the bankruptcy estate, not the individual to whom the policy was sold.

    Discharge from bankruptcy does not alter the position

    Discharge from bankruptcy does not alter this position. Discharge does not operate to transfer unrealised assets, including PPI mis-selling claims, back to the individual.

    Considering a PPI mis-selling claim: refer to the official receiver or trustee

    If a (former) bankrupt considers that a PPI policy was mis-sold, they should not attempt to pursue a mis-selling claim without reference to the official receiver or trustee.

    If a claim has already been made, the official receiver or trustee should be informed of the claim and the person against whom the claim is being made should be informed of the bankruptcy

    Use of claims management companies

    The Insolvency Service is aware that some (former) bankrupts have used claims management companies to pursue PPI mis-selling claims for them. If these services are used after the date of the bankruptcy order, it is possible that the individual will remain responsible for all or part of the commission charged if an award is paid to the official receiver or trustee. This may be because the amount of the commission is challenged by the trustee or if the firm against which the award is made is a creditor in the bankruptcy and exercises a right to set-off the award against its claim in the bankruptcy. This could result in no payment being made from which the commission could be paid.
    As such, care should be taken before acting in this way.

    Best course of action: contact the official receiver or trustee

    The best course of action for any individual contemplating making a PPI mis-selling claim who is or has been affected by bankruptcy is to contact the official receiver or trustee dealing with their case before proceeding further.
    Last edited by fermi; 22-02-2015 at 7:56 AM.
    I'm a Board Guide on the Debt-Free Wannabe, Bankruptcy, Credit Cards and Loans boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com

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    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
    • fermi
    • By fermi 2nd Sep 11, 6:23 PM
    • 39,229 Posts
    • 47,072 Thanks
    fermi
    • #3
    • 2nd Sep 11, 6:23 PM
    • #3
    • 2nd Sep 11, 6:23 PM
    IMPORTANT: IF YOU ARE APPROACHED BY A COMPANY THAT TELLS YOU THAT YOU CAN CLAIM AND KEEP REFUNDS ONCE YOU ARE DISCHARGED, THIS IS A LIE.

    Please report any such companies to the Ministry of Justice and the Insolvency Service, and send them copies of any paperwork making these false claims.


    THIS applies even if the account/policy was paid off before your bankruptcy.

    Thanks for that debtinfo.

    Whether or not people get the all the technical nuances of the rest, I think this part is the crucial thing people need to understand.

    This means that not only do you not have the right to receive the monies from any claim but that you also do not have the right to make the claim, That right passed to the trustee and so it is the trustees right whether to take it forward or not, the claim now belongs to them.

    As far as I last heard the Insolvency service is trialling using a solicitors firm to take batches of these claims forward en masse to the banks and therefore if you have already made the claim and pocketed the cash there is a good chance that the IS will at some point try and cash in the claim and therefore realise that you already have. At that point they will have the option of recovering it from you.
    Originally posted by debtinfo
    Last edited by fermi; 15-01-2015 at 1:47 PM.
    I'm a Board Guide on the Debt-Free Wannabe, Bankruptcy, Credit Cards and Loans boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com

    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
    • fermi
    • By fermi 4th Aug 15, 2:05 PM
    • 39,229 Posts
    • 47,072 Thanks
    fermi
    • #4
    • 4th Aug 15, 2:05 PM
    • #4
    • 4th Aug 15, 2:05 PM
    https://www.gov.uk/bankruptcy-payment-protection-insurance-ppi-mis-selling-claims

    Guidance
    Bankruptcy: Payment Protection Insurance (PPI) mis-selling claims

    From:The Insolvency Service

    First published: 4 August 2015

    This guide explains what happens to Payment Protection Insurance (PPI) and mis-selling claims in bankruptcy


    Contents
    1. Overview
    2. Why must the PPI mis-selling claim be paid to the trustee?
    3. Can I claim the funds for myself?

    Overview

    PPI is an insurance contract generally taken out when a loan or credit card is obtained. This contract is an asset, as is the right to complain if it was mis-sold. If you took out PPI prior to becoming bankrupt, then the PPI and any claim that it was mis-sold must be handed over to your bankruptcy trustee or official receiver.

    This is the same as other financial products which have been mis-sold including other loan and credit card protections, bank accounts, interest rate deals and loans.

    Why must the PPI mis-selling claim be paid to the trustee?

    The right to make a claim comes into existence when the PPI or other product was originally mis sold. It is still an asset in the bankruptcy even if you didn’t know you could claim compensation until after your bankruptcy. PPI is a separate contract to the loan or credit card it covered. Even if the loan has been repaid in full, any compensation for mis-selling is still a bankruptcy asset.

    Can I claim the funds for myself?

    The mis-selling claim belongs to the bankruptcy estate. Funds cannot be returned to you under any circumstances. Ill health, hardship or discharge from bankruptcy does not entitle you to the funds. If you make or continue a mis-selling claim after you become bankrupt, any funds must be paid to the trustee. You might still be liable for fees if you agree to pay someone to make the claim for you. For further information, contact the Insolvency Service PPI team.


    Insolvency PPI Team

    Email: RTLU.NorthEast@insolvency.gsi.gov.uk
    Telephone: 0191 260 4534 0191 260 4547 Monday to Friday, 9am to 5pm Find out about call charges






    I'm a Board Guide on the Debt-Free Wannabe, Bankruptcy, Credit Cards and Loans boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com

    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
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