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Tuesday, 10th April 2012
The Insolvency Service has issued information for individuals who may have been mis-sold payment protection insurance but have yet to make a claim.
They warn that bankrupts could be held responsible for all or part of the commission charged by a Claims Management Company (CMC) even if an award is paid to the Official Receiver (OR) or Trustee overseeing the bankruptcy.
They advise that this may arise because the amount of the commission is challenged by the Official Receiver or 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.
A PPI mis-selling claim in now part of the bankruptcy asset
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
Being discharged from bankruptcy does not alter this position. Discharge does not operate to transfer unrealised assets, including PPI mis-selling claims, back to the individual.
Are you already bankrupt or about to be and considering a PPI mis-selling claim?
If a former or current bankrupt considers that a PPI policy was mis-sold, they should not attempt to pursue a mis-selling claim without contacting the Official Receiver or Trustee first.
If a claim has already been made, the Official Receiver or Trustee should be informed of the claim and the person or firm against whom the claim is being made should be informed of the bankruptcy.
Best course of action: contact the Official Receiver or Trustee
Extreme caution should be exercised in any of these circumstances and the best course of action is to contact the Official Receiver or Trustee dealing with the case before proceeding further.
Are you owed thousands of pounds in mis-sold Payment Protection Insurance (PPI)?
If so we can help you with our free DIY template letters.