The Insolvency Service states that if a PPI (payment protection insurance) policy was mis-sold before the date of your bankruptcy, any claim that the policy was mis-sold would be owned by the Official Receiver or trustee of the bankruptcy estate. The claim is not owned by you.
It’s all to do with assets and the term ‘right of action’, known commonly by its acronym ROA. When you originally signed up for PPI, that is when the ROA began. When a person is declared bankrupt, all assets transfer to the trustee – except for specific provisions such as basic living goods – and any matters that could be defined as a ‘right of action’ are included as an asset.
As your PPI claim relates to credit agreements signed before the bankruptcy then these PPI claims are all assets and they all vest with the trustee of your bankruptcy.
“The right to compensation for the mis-selling of PPI is a cause of action that vests in the bankruptcy estate when it arises,” said leading bankruptcy lawyer Frances Coulson.
“I appreciate that it is a disappointment to a victim of mis-selling but a trustee is under a duty to recover what he/she can for the creditors under the law and the law is something the trustee has to abide by.”
If you were formerly bankrupt and feel that a PPI policy was mis-sold, you are advised against pursuing a mis-selling claim and should instead refer it to your official receiver or trustee.
If your claim has already been made, the official receiver or trustee should be notified and the individual/company against whom the claim is being made should be informed of the bankruptcy.
So, in summary, any mis-sold PPI claim would be deemed an ROA which is an asset and because your PPI credit agreement was signed before your bankruptcy, this asset vests with your trustee.