Discharged bankrupt

amstel2

Hello

Wonder if anybody can advise on the following.

I have been discharged from Bankruptcy for over seven years. While Bankrupt I completed a three year IPA. Also two years ago I received a letter from the Official Receiver giving all the details of payments made to the IPA, fees paid, & the dividend payment made to the creditors.

A few months ago I received an un-solicited letter from a former creditor stating I had been identified as having been mis-sold PPI. I phoned them up & told them I was a discharged bankrupt & thought I was not entitled to any compensation. They where adamant that as the policy concerned was a “Payment Break” policy & i was discharged any compensation award was mine to keep. I was subsequently awarded £2000 & the cheque was paid to me.

Based on this I have contacted the other creditors & so far have had the PPI complaints upheld but they are all saying the compensation has to go to the Official Receiver “The Trustee in my bankruptcy estate”.

Now bearing in mind the only contact I have had off the O/R since discharge is the letter saying basically I no longer have a Trustee & that an IPA & dividend has been paid (how can I still have a bankruptcy estate). In addition the O/R themselves have done nothing in all these years to reclaim the PPI. I feel I have done all the work for nothing & they are making this money off my back. Also I have checked my copy of the Bankruptcy Order & there is nothing about PPI. Also in my copy of my interview with the Insolvency Service no questions where ever asked about PPI.

I am currently querying this with all the creditors & if no luck their I will contact the O/R. Surely at the very least I can keep the compensation element. As far as I can see this has nothing to do with the original debts & is not a windfall.

If the creditors or O/R won’t budge I can get free legal advice via my TU, Also does the O/R have a regulator.

Any advice appreciated. It’s really depressing when you get a letter off a creditor where page one tells you the claim is upheld & your getting all this money then page two tells you it’s going to the O/R.

Thanks

dunstonh

I phoned them up & told them I was a discharged bankrupt & thought I was not entitled to any compensation. They where adamant that as the policy concerned was a “Payment Break” policy & i was discharged any compensation award was mine to keep. I was subsequently awarded £2000 & the cheque was paid to me.

You were given incorrect information by the claims company. Any award on something paid pre bankruptcy is classed as a pre-bankruptcy payment. CMCs are told to give the correct information in cases like this and that the money should likely end up being requested by the OR. In your case that has not happened and you have grounds for complaint against the CMC.

In addition the O/R themselves have done nothing in all these years to reclaim the PPI.

Why should they? There is nothing wrong with having PPI. The whole thing is whether it was sold correctly or not. They wont know this. They wont even know if you had PPI to begin with.

I feel I have done all the work for nothing & they are making this money off my back.

The OR doesnt keep the money. It is distributed to the creditors you failed to repay. I am sure they were not happy when they didnt get paid for all the work they did.

I am currently querying this with all the creditors & if no luck their I will contact the O/R. Surely at the very least I can keep the compensation element. As far as I can see this has nothing to do with the original debts & is not a windfall.

it doesnt belong to you and the Govt is quite clear on it. It is a pre-bankruptcy asset.

https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/bankruptcy-2/ppi-claims-after-bankruptcy/

It’s really depressing when you get a letter off a creditor where page one tells you the claim is upheld & your getting all this money then page two tells you it’s going to the O/R.

its really depressing when someone owes you money is made bankrupt and you dont get paid. You cant have it both ways.

amstel2

Just like to clarify.

I have never used a claims company. The intial compensation i recd & advice given was from a former creditor.

The O/R did get paid for their work. You should seen the fees they from the IPA never mind the court fees.

Thanks

magpiecottage

The point is that on bankruptcy, you lose all your assets which pass to the trustee. That includes assets you may not realise exist at the time - including any rights of action at against somebody else.

If, such a right is subsequently discovered it rests with the trustee, not you. If the person against whom that right of action is still a creditor, they are entitled to set off any amount successfully claimed against any debt owing to you before passing any excess on.

However, that excess will be the a pre bankruptcy asset and, like any other prebankruptcty asset, the trustee has a duty (after taking their charges and costs) to distribute it among the other creditors.

Only if there is money left after all that has been done are you entitled to any surplus because you ranked behind all of your creditors when you were made bankrupt.

amstel2

Whats puzziling me in all this. Is that the former creditor (credit card company) who originally refunded me & knew i was a discharged bankrupt. Also knew i still had a debt with them

amstel2

Also forgot to add. Some of the offer letters state i have to sign the acceptance form to enable them to pay the O/R. Well that wont be happening.

magpiecottage

amstel2 wrote: »

Whats puzziling me in all this. Is that the former creditor (credit card company) who originally refunded me & knew i was a discharged bankrupt. Also knew i still had a debt with them

Probably incompetence on their part. However, if it came up in an audit, somebody might contact the Official Receiver to ask why no share of the redress had been passed back to them. That could cause you a problem.

amstel2 wrote: »

Also forgot to add. Some of the offer letters state i have to sign the acceptance form to enable them to pay the O/R. Well that wont be happening.

I suppose it depends what you want to do.

You could go to FOS - but an Ombudsman is likely to conclude, at best (from your point of view) that they are being reasonable. They could instead conclude that the right to complain rests with the Official Receiver, not you, anyway. If they then contact the Official Receiver, you could find yourself having to explain why you went behind their back and sought to gain assets that lawfully belong to your creditors.

If you refuse to sign, it is likely that any offer will lapse and result any time limit to go to court or FOS expiring. If you do that, then the bank keeps the money.

So I think it is a casec of heads they win, tails you lose.

dunstonh

Whats puzziling me in all this. Is that the former creditor (credit card company) who originally refunded me & knew i was a discharged bankrupt. Also knew i still had a debt with them

As it wasnt a CMC then was it a CCL letter you were were sent? a letter inviting you to complain if you felt you were missold with examples given? If so, these are sent out with the only criteria whether you had it or not.

Also forgot to add. Some of the offer letters state i have to sign the acceptance form to enable them to pay the O/R. Well that wont be happening.

Either they wont pay to you at all or they will pay you and notify the OR. You are legally required to tell the OR. So, you could be putting yourself in a difficult position if you do this.

amstel2

dunstonh wrote: »

As it wasnt a CMC then was it a CCL letter you were were sent? a letter inviting you to complain if you felt you were missold with examples given? If so, these are sent out with the only criteria whether you had it or not.



Either they wont pay to you at all or they will pay you and notify the OR. You are legally required to tell the OR. So, you could be putting yourself in a difficult position if you do this.

Out of curosity what could they potentially do if i did receive any of the compensation. As i am not scared of the O/R. As far as i am concerned their just a bunch of Civil Servants like me. If i've got it they wont get a penny out of me.

dunstonh

Out of curiosity what could they potentially do if i did receive any of the compensation. As i am not scared of the O/R.

It is a breach of law.

If the Official Receiver considers that the conduct of a bankrupt has been dishonest or blameworthy in some other way, he (or she) will report the facts to court and ask for a Bankruptcy Restrictions Order (BRO) to be made. The court will consider this report and any other evidence put before it, and will decide whether it should make a BRO. If it does, the bankrupt will be subject to certain restrictions for the period stated in the order. This can be from 2 to 15 years.

There was actually a recent case for someone that failed to disclose. In that case, the person was discharged in 2013. In August 2014, the OR found out that he had failed to disclose assets. In that case, he was bound for 9 years, by the restrictions set out in insolvency law that a bankrupt is subject to until they are discharged from bankruptcy – normally 12 months – until 2022. In addition, he cannot manage or control a company during this period without leave of the court.

fermi

From the Insolvency Service.

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

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.