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Discussion and questions about what to expect when your bankruptcy is finished
By Greg33
I am a discharged bankrupt in 2011 and I have been approcached by a company to claim back my PPI. I have been told by the OR that if I claim now they are entitled to the whole lot and that they have recently set up a team to go after ex bankcrupts for the last 6 years and that if i had already claimed back ppi and recieved this money I would have committed a criminal offence. But your site says I can make a claim - what is my position?
Hi there Greg33 and welcome to the forum.

That is very interesting information that you have been given by the official receiver. I know that if you claim for PPI after you are discharged from bankruptcy the claim is treated as an unrealised asset of the bankruptcy and therefore still payable to the OR. However my understanding has been that the OR is willing to agree an amicable split if you agreed to do the leg work of making the claims.

From what you have said it sounds as though this attitude may be changing. If the Insolvency Service (who employ the ORs) do get organised and employ a claims management firm to help discharged bankrupts make PPI claims then it sounds as though they may be in a position to force you to claim and say that you will not get anything. It looks like they are now paying the percentage of the claim that they would have given to you to a claims management company instead....
Hello Greg33. I would be interested in the BeatMyDebt.com expert's view on this. As far as i am aware the advice so far is that an agreement can be made with the official receiver to split any potential PPI compensation. However this might well be changing....
Hi Greg33

The landscape surrounding claiming for PPI after you have been discharged from bankruptcy is changing fast. As far as I can make out the official receiver's office has now become aware of the fact that PPI could be a way to recoup some of the costs associated with bankruptcy which would otherwise not be paid because there are no funds available from the bankrupt person themselves.

There is no question that after someone is discharged from bankruptcy then a subsequent PPI claim is an unrealised asset and as such if compensation is paid this should go to the official receiver. In the past it was certainly possible to negotiate with the OR but it now seems that the door on this option is being closed. I have also heard that people who are going bankrupt now are being asked to sign a document confirming their understanding that all subsequent PPI claim compensation must be paid to the OR.

As such it seems as though it is very much the case that if you have been discharged from bankruptcy there will be little point in you submitting a claim for PPI and if you do you are unlikely to benefit personally.
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By Hayden
That is interesting James. Does this now mean that people who have declared themselves bankrupt are pretty much never going to benefit personally from claiming for PPI?
I was speaking to a lawyer colleague of mine yesterday Hayden and they confirmed that after someone has been declared bankrupt, the opportunity for them to benefit from a PPI claim is virtually nil especially if they have been discharged recently (ie in the last year or two).

They did mention that there might be a possibility for the individual to benefit if they were discharged a long time ago (say 5-6 years ago). There could then be an arguement to say that the OR has lost the opportunity to give claim to the PPI compensation. As such in this situation it might be worthwhile a claims lawyer speaking to the OR to see if a deal could be struck. If I hear any more I will of course let everyone know.
Hi All

I was discharged from my bankruptcy in February of this year, on the one occasion I spoke to my OR I was informed that as I'm making a payment each month, if I were to pay in any PPI award I may in fact pay back more than I originally owed and might be due a refund after the 3 years, is this a realistic view from my OR? I've never been give an final figure as far as my outstanding debt was concerned, when I asked the OR he was a little evasive and started muttering about OR costs etc.
Hi kjmc1957

This is a really interesting comment from your OR. In theory they are right. If you make claims for PPI and the compensation received is enough to pay your debt in full then you might end up with some of the cash.

BUT, and it is a BIG BUT. On top of your debt, the official receiver is allowed to add their costs. These will be a flat fee of £1715, then a fee to the secretary of state (ie government tax) of 15% of the amount you pay and then additional OR fees based on a time and materials basis (so anybody's guess). On top of all of that the OR can also charge interest on the debt from the date of your bankruptcy at 8% per year.

Only after all of these costs are taken into account (after 100% of your original debt was paid) would you be left with anything. As such its my view that it will be very unlikely that you will be left with anything after receiving PPI compensation and there is really no point in you considering it. The only person who will benefit is your OR.