Hello babyd12.

A difficult one to give you a definitive answer on, so you'll probably want to contact your trustee to confirm the position at some point.

However - the creditor concerned is playing it safe by sending the funds to your trustee. It's what happens after your trustee receives it that's important.

If your trustee isn't yet discharged (you can check on the Register of Insolvencies) they will almost certainly receive this payment and use it to pay out more to your creditors.

If your trustee has been discharged they might possibly forward the money to you.

However, we're increasingly hearing of attempts to re-open trust deeds to "capture" such PPI funds for the benefit of creditors even after trustee discharge. You can read more about that scenario at:

Link Updated 2020: https://www.trust-deed.co.uk/rbs-and-ppi-claims-after-trust-deeds.html

A few cases springing up now of trustees attempting to reopen old trust deeds to ingather ppi funds...something that they should have pursued throughout their clients original trust deed term, its all old hat now but basically jumping on the bandwagon of other trustee companies to get more money "for the creditors"!!! and oh of course not to increase theyre fees!! Ive said it before, trustee companies are only damaging their own industry by going down this road but do as you may.(Only my opinion) others may disagree:)

Hi littlemo.

As we've discussed before, the responsible government agency (the AIB) is doing the exact same thing regards sequestration. It's also happening south of the border with insolvency processes there.

As we've also discussed, you can hardly blame a trustee if a creditor unfairly refused a claim but are then being forced to pay out later by a regulator. Why should creditors lose out in that scenario? Why should the ex-debtor benefit?

You're entitled to your view, but there a plenty of strong counter-arguments.

Hi tda
I think professionals in this industry should step back and have a clear look at this and they may understand my view here, and of course they may not, first of all you are of course right, this has happened with cases down south and is starting to shift from insolvencies involving businesses to the general main stream Trust Deed system although still rare, it sounds like its moving in that direction by the amount of info from members on here, now you are aware of my feelings about pursuing folk for ppi after discharge and how the trustee has plenty of time and is paid well enough to complete these investigations during the trust deed time frame,in regards to what you are saying about the creditor unfairly refusing a claim during the trust deed,well what are we paying trustees to do?...do they just roll over when a bank says no there isnt any ppi to pay and say yes ok sorry bank you must be right? a trustee is paid very well to deal with all aspects of a persons trust deed inclusive of dealing with ppi claims, they can easily work with their client to gauge how much and if any ppi has been paid in the past and accertain if it ad been wrongfully sold,
2nd point is,again the debtor is faced with the stress of having a trust deed reopened and all the emotional stress that that can bring, these firms cant possibly understand this or they would have done there job properly in the first place and carried out FULL checks on all aspects of ppi and pursued any ones that were declined that they were sure had a ppi claim.
3rd point is, and i feel this is the most critical is trust!!, businesses and theyre proprieters are very aware of the risk of insolvency and are more aware of the insolvency proccess in general and would most likely be aware of the possibilty of cases being reopened, people in the street who enter a trust deed are not that clued up on the insolvency proccess,and it will come as a shock to many people in the future if these start being reopened, people in my opinion will avoid trust deeds like the plague and your industry will struggle, thats my opinion and i believe your industrys problem at this moment, as ive said before " dont bite the hands that fee you all"

OK littlemo - I hear your thoughts.

A trustee cannot make a poorly behaving bank pay out PPI claims that they refuse to. That's a regulatory task - and that's what the regulators have done in many instances.

Very important to note (for anyone experiencing this) that an individual isn't brought into a trust deed again. It's just the trustee.

So what people need to know is that, if they become insolvent, their assets (owned at the start, or acquired prior to discharge) may be used to help repay their debts. In this respect, nothing has changed.

Like you, I'd much prefer it if there was no need for this to happen. It's not a perfect world however, and to seek to pin the blame for that on insolvency practitioners seems facile to me.

We can disagree though. Always room for friendly disagreements on forums!

Hi littlemo,

I hear your thoughts also and can understand your views on the points you are making.

Trustees are limited to how much time and resources they can dedicate to investigating PPI. If a bank advises that they will not pay out on a possible PPI compensation claim then as TDA has advised it's then down to the regulators to review this. These types of decision can take a considerable period of time to happen. A Trustee therefore needs to take a decision on continuing with a case or closing it.

It could take a substantial sum of money (Hundreds of Thousands of pounds) for a Trustee to challenge a bank's decision regarding a PPI claim via the legal court route. One of the biggest problem banks have been the RBS who decided to offset any PPI claim against any debt that the client had with them. I'm not aware of anyone who has decided to legally challenge the RBS regarding this. The RBS will believe they have a sound legal argument for doing this and it would be up to someone to challenge this. Until someone does the RBS may continue to offset the debt. If someone does spend the time and financial resources challenging this and are successful then the RBS could be required to review all of their decisions. The majority of other banks have paid out PPI compensation to Trustees.

As has happened banks have refused claims and after a period of time the regulator has advised them that this is incorrect. For all of the Trust Deed's that were closed because of this some Trustees are now considering re-opening them to be able to legally ingather the money and pay this sum to creditors. Like TDA has advised, a Trust Deed being re-opened doesn't have any impact on the individual. The Trustee is simply ingathering the money and distributing this to the creditors. Is an individual unhappy about this because they wanted to keep the money for themselves? I don't know.

The Accountant in Bankruptcy will look to re-open a Sequestration case should PPI arise after the case has been discharged. I've heard this first hand from John Cook, Deputy Accountant in Bankruptcy in a recent lunch and learn event that I organised him to speak at. He was quite clear on this.

In my 12 years of experience the Insolvency industry has changed substantially I'm sure will continue do to so in the future. Trust Deed are far better regulated than they ever have been with more attention paid by creditors and also the Scottish Government. It's a highly regulated industry. Society is built on credit and the buy not pay later attitude. This is fine when times are good but unfortunately when circumstances change people will find themselves financially struggling and need to consider one of the debt relief options to help clear their debts. I believe the solutions we have in Scotland for this are excellent but unfortunately they don't please everyone but for the vast majority of people in Scotland they complete a Trust Deed successfully and without any problems and are happy with the process.

Have roughly read both replies and very much appreciated you both have taken the time to reply...am at work now so will reply when i get home ta