Can PPI payouts cancel out bankruptcy?

HONEYMONSTER

I have a strange query I would appreciate your thoughts on please?


Due to serious ill health I declared myself bankrupt in 2010 and owed money to 4 companies. I was discharged in 2011. Late last year, on point of principle I claimed misselling of the PPI on each of the accounts (with the Official Receivers prior permission).


So far two of them have been successful and each one has paid out more than I actually owed to them when I went bankrupt (this money went to the OR).


This is kind of rankling me now as had I had this money at the time I went bankrupt, I wouldn't have needed to declare myself bankrupt in the first place!


However, and I am just hypothesising here, if the other two PPI claims come in on a similar basis, this means that the total PPI payout by each company will be more than I owed each individual creditor when I went bankrupt so, could I get my bankruptcy nullified on the basis that had I never been miss-sold the PPI in the first place, then I would never have owed those sums to each creditor and I would have had no need to go bankrupt?


Sorry this is a sort of self torture really but I just wondered what the line of thought would be on this.

tomtontom

You can apply for an annulment, but keep in mind that you'll need to cover the OR's fees, not just your debts. I'd recommend speaking to a debt specialist, either at CAB or one of the debt charities, given the time that has passed there may be little point in pursuing this.

HONEYMONSTER

Thanks for the quick reply.


I understand your point with regard to the time that has passed as my 6yrs is up in a few months but the point is that had I not been mis-sold I potentially wouldn't have had to go bankrupt so why would I need to pay the OR's fees. Sorry not being argumentative, just want to make an informed decision on the way forward should it transpire that my payouts exceed the monies I owe.


Just another question too, I'm assuming that any settlement monies always belong to the receiver even if its after the 6 years, as they were an asset?


Thanks

[Deleted User]

This would be better posted on the Bankruptcy section of the forum.

dunstonh

Normally, if an amount received by the OR is greater than the debt to the creditors, they will pay the surplus to you.

had I not been mis-sold I potentially wouldn't have had to go bankrupt so why would I need to pay the OR's fees.

PPI that was paid on a monthly basis is unlikely to have changed the outcome. A slow repeating small withdrawal is not likely to make the difference between bankruptcy or no bankruptcy.

Whilst the redress exceeds the debt currently outstanding, remember that other assets have been used to clear the rest of the debt and that this redress payment will be partly made up of interest. Indeed, it is not uncommon for interest to be the majority of the redress.

Nasqueron

How much of the refund was the 8% interest (simple, for every year) and would that have put it over the amount you owed? With BR obviously you wouldn't be paying interest on the finance either so the amount you owed would have been reduced by that too compared to paying the debts off in full in the normal timeframe

Was the PPI refund because the PPI would not have paid out due to your illness? I just ponder as the point of PPI is to cover payments if you can't make them and claiming on the PPI could have covered this for a while