Payment Protection Insurance (PPI) after bankruptcy
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 are 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 are 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 have 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
If you are 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 are 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 will use this money to pay your bankruptcy creditors.
If there is money left over once we’ve paid back all your debts, you will 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 are 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 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.
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 are 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
Insolvency PPI Team
Email:RTLU.NorthEast@insolvency.gov.uk
Telephone: 0300 6780015
The helpline is open 9am to 5pm Monday to Thursday, and 9am to 3pm on Friday. Find out about call charges
Updates to this page
Published 5 May 2017Last updated 25 August 2022 + show all updates
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Update on the PPI project. We are now processing payments.
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PPI Project update. Focus has moved from resolving claims to processing compensation. Removal of Information for claims management companies (CMCs) as no longer relevant.
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Addition of deadline for submitting invoices
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Added guidance for creditors and claims management companies
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First published.