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Melanie.n
forum expert
United Kingdom
1282 Posts |
 Posted - 13 October 2011 : 11:36:48
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Hello there forum members, I just thought I would update you on a current query I have received from a number of bankrupt individuals, regarding PPI. (currently bankrupt individuals and those discharged)
A lot of people who are currently bankrupt, or indeed discharged from their bankruptcy, may be notified by their banks or loan companies that they are due a payment under a PPI policy (following court decision on PPI) If you have challenged any of your bank or loan creditors with regard to PPI and find that you are in the position of due a refund under the PPI (ie refund of premiums paid) or indeed, been contacted direct by your bank or loan company, please be aware of the following:
If your original loan to which the PPI refers, is included in your bankruptcy debts, then the OR has first call on any funds due - they are not yours, even if you have been discharged from the bankruptcy, as the PPI payment is due on a debt that was included in the bankruptcy. Banks may, have the right to set off any payment due under the PPI against the existing bank debt, which may result in no actual funds being available, but if after repaying the bank debt, there are still funds available - the OR has first call on this money.
Therefore I would advise anyone being informed by letter that they are due a payment under their PPI to speak to their OR - do not presume the monies are yours and spend them! as you may find that the OR will be chasing you for the funds!
I hope this clarifies things for you, Melanie
Melanie Nicholas CertDR
30 years insolvency experience - 23 of which in the Insolvency Service
- Insolvency Manager
Jones Giles
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Viki.W
forum expert
United Kingdom
2211 Posts |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 13 October 2011 : 13:38:45
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Thanks Mel
good update and advice.
I think The OR will get exceptionally grumpy and persue an individual to the end of the earth or time to get their money !
Bankruptcy is about drawing a line and allowing a fresh start. Whats behind the line should stay behind the line.
Good Luck Richard,
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glafy
forum expert
436 Posts |
Posted - 13 October 2011 : 16:01:35
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Thanks Mel.
A very useful post.
"Good things come to those who wait".....I'm a patient person but this is taking the Mickey!! |
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debtinfo
forum expert
2826 Posts |
Posted - 13 October 2011 : 16:11:47
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I have made a few posts on this subject recently much on the same line as mel.
i just wanted to add to what she has wrote that even if the debt is not in the bankruptcy, for instance if the debt had previously been paid off, then the right to the ppi claim is still an asset in the bankruptcy estate |
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Melanie.n
forum expert
United Kingdom
1282 Posts |
Posted - 13 October 2011 : 17:28:26
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The reason i did the update is that i had a call from an individual who had been informed she had a PPI refund due of over £10k - she rang me in desparation in that she had rung the OR spoke to the receptionist who informed her it was her's to keep as she had been discharged for over 2 years - she did not feel completely safe with the response rang again spoke to someone else who confirmed the same answer, she asked if they were sure, told hang on i'll just verify it and was then informed 'sorry I have given you the wrong advice'.
She rang a couple of IP firms who did not know the answer or indeed again stated, she was discharged and therefore hers to keep. Thank fully she eventually rang me for clarification - I was pretty sure on my reply but double checked with the OR at the office concerned - I advised him of the advice his team were providing (boy was he cross!) no doubt some training will be going on across oR's office following my chat!
My greatest worry was this lovely individual (or indeed anyone else acting on the fact that the money was theirs and spending it only to find the OR pursing them in the new year (And boy would they!!!)
I would not want anyone to be in that position! thankfully to this clients perserverance she will not now be falling foul of the OR (In reality her bank will probably offset the money aginst the original debt)but just in case.....
Melanie Nicholas CertDR
30 years insolvency experience - 23 of which in the Insolvency Service
- Insolvency Manager
Jones Giles
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debtinfo
forum expert
2826 Posts |
Posted - 13 October 2011 : 18:22:04
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completely agree Mel, i wouldnt want be in that staff members shos today,
It is a good lessen though in, if you have an important question like that, put it in writing, then even if they get it wron they probably couldnt get it back from you |
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debtinfo
forum expert
2826 Posts |
Posted - 13 October 2011 : 18:35:03
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This is something i wrote for another website about a month ago, it is a bit more detailed but basicaly the same as what mel is saying
Ok then PPI, (that is payment protection insurance) and bankruptcy, or more specifically reclaiming PPI and bankruptcy. Please note this is not about if you are eligible (in terms of if you have been miss-sold) as that is not my area and there is plenty of advice on that elsewhere, probably elsewhere on this site in fact. So for the purpose of this lets just assume that you have been miss-sold and that there is a potential to make a claim against a bank.
It has been asked many times recently if you can reclaim the PPI on credit agreements if you have been made bankrupt, and more importantly for some people, whether you can keep any pay out.
The first thing to understand is why a claim can be made in the first place. If it has been miss-sold to you then there has been damage caused to you estate (your finances) and so you had a right to take action in court to seek recompense. This is called a right of action. Next to look at is when this right came into being. It comes into being when you signed that contract where the miss-selling was done, from that point onwards the right or action (ROA) comes into being.
Next is to see how that ROA interacts with bankruptcy, when you go bankrupt it is the default position that all of your assets transfer to the trustee of your bankruptcy unless there is a specific provision otherwise (for instance there is a specific position that you get to keep all your basic living goods). Now in the definition of what is an asset in bankruptcy it includes “Things in action”. An ROA is a “Thing in action” and therefore is an asset.
So to summarise the ROA is an Asset and that asset is created when you signed the credit agreement. Being that in these instances the PPI claims we are talking about are all on credit agreements signed before the bankruptcy then these PPI claims are all assets and they all vest with the trustee of your bankruptcy.
This means that not only do you not have the right to receive the monies from any claim but that you also do not have the right to make the claim, That right passed to the trustee and so it is the trustees right whether to take it forward or not, the claim now belongs to them.
As far as I last heard the Insolvency service is trialling using a solicitors firm to take batches of these claims forward en masse to the banks and therefore if you have already made the claim and pocketed the cash there is a good chance that the IS will at some point try and cash in the claim and therefore realise that you already have. At that point they will have the option of recovering it from you. |
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Daniel Griffiths
Junior Member
United Kingdom
268 Posts |
Posted - 14 October 2011 : 11:03:53
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| An excellent post, Debtinfo, however the final paragraph will have a serious concern for quite a few I expect. |
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Beens
Starting Member
United Kingdom
2 Posts |
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Beens
Starting Member
United Kingdom
2 Posts |
Posted - 06 December 2011 : 16:49:45
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Hi Mel,
This is so useful...i've been sitting all afternoon wondering whether the advice i've been given is true or not.
Can you please clarify for me..I paid off 3 loans (inc PPI) a year before I filed for bankruptcy in 2009. One loan was repaid in 2006, the other two were repaid in 2008! At the time, I didn't know that I could reclaim the PPI. I again took out a further loan to consolidate my credit card and current account debt after the two loans were repaid in 2008. I filed for bankruptcy in 2009 and discharged in 2010. In my Statement of Affairs, the 2008 consolidated loan, Endowment Policy and Pension were all noted. However, the loans which had been repaid were not because I didn't owe anything.
I have since been informed by the OR that they will be making a claim on the Endowment Policy even though its been 2 years after the bankruptcy.
I would be grateful if you can clarify for me - would the OR still have a claim. The debt for which I was made bankrupt is nothing to do with the previous loans. It was accumulated after. Please help.
Thanks
Beens |
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Topic |
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PPI - clarification regarding refunds on PPI
