If you are already discharged from bankruptcy then generally speaking if you receive a windfall from now on such as an inheritance payment or bonus at work this money is yours to keep. You would have thought then that the same is true if you make a claim for PPI miss-selling. In fact this is not the case.
Any PPI compensation you receive after you are discharged will still have be paid to the Official Receiver (OR) because it is an unrealised asset. The possibility that you are entitled to PPI compensation existed at the time you were declared bankrupt and as such any compensation you receive now is still an asset owned by your bankruptcy estate.
But if this is the case how could it possible for you to benefit from a PPI claim as Jefferson Hobbs suggest? We consider how this might work.
Can still benefit from a PPI claim after Bankruptcy?
The key to answering this question lies in the fact that as a discharged bankrupt you are under no legal obligation to make a claim for PPI miss-selling. Whether you make a claim or not is up to you.
Because you are not obliged to make a PPI claim it is therefore possible to negotiate with the Official Receiver who dealt with your bankruptcy over who will receive the compensation payment if you decide to make a claim.
You can approach the OR and suggest a reasonable split (perhaps 50/50) of any compensation received between you and your bankruptcy estate on the basis that if no agreement can be reached you will not make the claim at all and no-one will stand to benefit.
BMD Tip: Even if you approach the OR it is by no means certain that the OR will agree to split any PPI compensation with you. However there is nothing to stop you asking the question of them.
Do you need Jefferson Hobbs to help?
As a discharged bankrupt, if you feel that you are eligible for PPI miss-selling compensation then in order to gain personally from any claim you make you will have to negotiate with the Official Receiver as to how the compensation payment will be divided.
Generally speaking this is a relatively simply process and you do not need any third party help. You simply need to contact the OR who dealt with your bankruptcy and explain that you will be prepared to make a PPI claim if you can both agree on a reasonable split of the payment.
Once you reach an agreement make sure that you ask for this to be put in writing. You can then show the bank a copy of this so that they send you your split of any compensation payment. Otherwise the compensation cheque will probably be sent directly to the Official Receiver from the bank.
Clearly if you do not feel confident to negotiate with your OR, then using a third party to help would be a good idea. However you will of course have to pay them a percentage of any compensation money you personally receive as a fee.
What if I do not negotiate with the OR and still make a PPI claim?
If you make a PPI miss-selling claim without first negotiating how any compensation will be split with the Official receiver, it is likely that all the compensation awarded will be paid into your bankruptcy estate. The only exception to this is if you make a PPI claim against a bank which was not owed money as part of your bankruptcy and is unrelated to any bank that was.
Where this is the case, the bank you are claiming against may be unaware that you were bankrupt in the past and will therefore make the compensation payment directly to you.
However there is no guarantee of this and it is just as likely that the bank will check to see whether you have been made bankrupt in the past and if so ensure that your compensation cheque is forwarded to the official receiver rather than you.
Claiming for PPI while still bankrupt
If you are still bankrupt and waiting to be discharged, there is really very little point in you making a PPI claim.
If you do make a claim while you are bankrupt, any compensation paid must automatically be treated as a windfall and will e paid directly to the Official Receiver.
As such if you feel that you were miss-sold PPI, it would be best to wait until you are discharged from your bankruptcy.
Only then can you approach the Official Receiver and suggest a equitable split of any award based on you doing the work to make the claim.
