Payment Protection Insurance (PPI) after bankruptcy
Source: gov.uk (2025-04-04)

A guide to what happens to a PPI claim after someone has been made bankrupt in England and Wales.

What is Payment Protection Insurance (PPI)

PPI is an insurance contract that can be taken out with a loan, credit card or other financing options (such as catalogue accounts). A PPI policy would cover some or all of your repayments if you could not work and make your payments.

Mis-sold PPI

You may have been mis-sold PPI if:
- you did not agree to take out a policy
- you were not aware it was included
- you were pressured into taking out a policy
- it was not properly explained to you
The right to claim compensation for mis-sold PPI has now ended and we’re processing dividend payments to creditors.

PPI compensation for bankrupts and former bankrupts

A PPI contract, and any compensation received if it was mis-sold, is an asset in a bankruptcy.

You must tell the official receiver if:
- you think you have been mis-sold a PPI policy
- you have a mis-sold PPI claim in progress
- you’ve previously made a claim for mis-sold PPI and received the money
What happens to your PPI compensation

By law, we cannot return any money directly to you under any circumstances, including ill health and financial hardship. This includes if you signed the PPI contract before the date of your bankruptcy.

We pay any compensation you’re entitled to (minus fees and costs), directly to your creditors to help repay your debts.

The money will be paid to your creditors even if:
- you’ve been discharged from bankruptcy when we make the claim payment
- you did not know you could make a PPI claim before you were bankrupt
- you’ve repaid the loan the PPI was mis-sold with in full
If you’re contacted by a claims management company

If a claims management company contacts you and encourages you to make a claim, you should say no and speak to the official receiver. You should do this even if they tell you your claim is not affected by your bankruptcy.

If you make a claim yourself, you might also be responsible for paying the claim company’s fees and commission. Usually, their fees and commission are deducted from your payment. However, all the money must go to your bankruptcy, so these amounts cannot be deducted

For further information, contact the Insolvency Service PPI team (#contact)

If you’re a former bankrupt

If you made a claim after your bankruptcy, any money will still go to the official receiver as your bankruptcy trustee.

If you’re a former bankrupt and believe a PPI claim was made by your bankruptcy trustee, you do not need to do anything. If we receive PPI compensation, we’ll use this money to pay your bankruptcy creditors.

A notice of intended dividend may be placed in The Gazette to alert your creditors to submit a claim. This notice will also be published online via The Gazette website and can be accessed using internet search engines.

If there is money left over once we’ve paid back all your debts, you’ll get this money back. We will send you a letter if this happens.

Please do not contact us for updates on the status of your case. We’re processing payments as quickly as possible and further contact slows down this process.

Information for creditors

If you’re a creditor in a bankruptcy the official receiver will contact you to complete a proof of debt form. We process proof of debt forms and work out how much we can pay you from the bankruptcy estate (this includes any PPI compensation available). We aim to make dividend payments within 8 weeks of receiving your claim.

Contact the PPI team (#contact) if you are unable to complete a proof of debt form.

If there is no money available to pay creditors, we will not contact you.

If you are owed money by someone who is bankrupt you have to register as a creditor. Find out more about how to register as a creditor in personal insolvency (https://www.gov.uk/government/publications/claim-money-back-from-a-bankrupt-person-or-company-in-compulsory-liquidation-guidance-for-creditors).

Update on the PPI project

This project has now ended. We have a significant number of creditor payments that we’re working to process and pay.

If you’re listed as a creditor in a case we’re dealing with, you do not need to do anything. We’ll contact you directly if we need any further information.

Unfortunately, we cannot tell you when we expect to make your payment or provide updates on individual bankruptcy cases.

We’re dedicating all our available resource to processing and making payments as quickly as possible.

If there are any changes we’ll continue to update this page, so keep checking for new information.

Contact us

Contact the official receiver

Information on contacting the official receiver (https://www.gov.uk/government/publications/contacting-an-official-receiver/contact-information)

Insolvency PPI Team

Email:xxx@xxx.xx (mailto:xxx@xxx.xx)

Telephone: xx-xxxx-xxxx

The helpline is open 9am to 5pm Monday to Thursday, and 9am to 3pm on Friday. Find out about call charges (https://www.gov.uk/call-charges)