This section holds useful information regarding debt questions and bankruptcy questions.

Moderators: TalbotWoods, JaneClack

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By TalbotWoods
#299623 This comes up periodically and we now have advices form the Insolvency Service

Payment Protection Insurance claims and Insolvency

(Includes Bankruptcy, IVA's and DRO's)

The Insolvency Service has issued guidance for people who become insolvent after they have been mis-sold Payment Protection Insurance (PPI).

If a PPI policy was mis-sold before the date of a client’s Insolvency, any claim relating to the mis-selling of the policy counts as property and will vest in the official receiver or trustee, not the client.

Unrealised assets remain with the official receiver or trustee and do not transfer back on discharge. This includes PPI mis-selling claims.


The Insolvency Service are advising that if an insolvent, or former insolvent, considers that a PPI policy was mis-sold they should not attempt to pursue a claim for this without contacting the official receiver or trustee. If a claim has already been made the official receiver or trustee should be informed of the claim and the person against whom the claim is being made should be advised of the insolvency.

If the client uses a claims management company after the date of insolvency there is a risk that they will incur a debt for all or part of the commission charged.

The Insolvency Service is advising that the best course of action for anyone contemplating making a PPI mis-selling claim who is currently Insolvent or has been Insolvent in the past is to contact the official
receiver or trustee dealing with their case before proceeding further.