The Insolvency Service has issued advice on bankruptcy for individuals who believe they were mis-sold payment protection insurance (PPI).
PPI is intended to protect people against the financial fallout of redundancy, critical illness or other unpredictable interruptions to their ability to earn an income.
However, there have been a large number of claims made recently from customers who believe they were not sold PPI policies appropriately.
Objections range from the way providers charge for the policies, to customers who say they were ineligible for the product from the outset, for example due to a pre-existing medical condition.
Failing to secure a PPI payout may have left some people facing financial disaster when they needed their policy the most – and may, in some cases, have led to them filing for bankruptcy.
Those people are unlikely to be cheered by the Insolvency Service’s advice on bankruptcy’s impact on their right to make a PPI mis-selling claim.
Any such claim is treated as an asset under the terms of the Insolvency Act 1986, meaning the individual loses the right to the claim and their receiver or trustee becomes the legal recipient of any compensation.
If you think you may be affected by this, speak to our insolvency practitioners and we can help you to decide whether you still have the right to make a claim after filing for bankruptcy or arranging an IVA.