Claiming In An Iva Or After Bankruptcy
Being in an Individual Voluntary Arrangement (IVA), or having been bankrupt or in a Debt Relief Order (DRO), does not stop you from making an unaffordable lending complaint. But it changes who gets the money. Depending on when the lending was given and when the insolvency event happened, the redress may belong to your trustee, supervisor or official receiver rather than to you. This page sets out the rules and the practical implications.
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The starting principle
In English law, claims that exist at the date of bankruptcy or the start of an IVA generally pass to the trustee in bankruptcy or the supervisor of the IVA. They form part of the estate available for creditors. The “claim” is the right to bring an unaffordable lending complaint, and it crystallises at the point the lending was given (or, for ongoing accounts, when the unfair lending occurred).
So the broad rule is:
- Lending given before the insolvency event — the redress potentially belongs to the trustee/supervisor/official receiver.
- Lending given after the insolvency event — the redress is yours.
IVAs in detail
An IVA is a formal arrangement to pay creditors over a fixed period (typically five years), supervised by an insolvency practitioner. The terms of most IVAs include “after-acquired property” clauses that capture windfalls and unexpected funds during the IVA period — including unaffordable lending refunds.
In practice this means:
- Redress on lending given before the IVA started usually goes to the supervisor for the benefit of all creditors in the IVA.
- Redress on lending given during the IVA may also fall within the IVA terms, depending on the specific clauses.
- Once the IVA has concluded successfully and you have been discharged, redress on post-IVA lending is yours.
- Some IVA terms include specific provisions about complaints to the IVA supervisor about IVA-period lending — read the terms or ask your supervisor.
You can — and often should — still bring the complaint, but tell your IVA supervisor before doing so. They will guide you on whether the complaint should be brought in their name, whether the redress is captured by the IVA, and how the funds should be handled.
Bankruptcy in detail
In bankruptcy, all property (including legal claims) at the date of bankruptcy vests in the trustee. After discharge (typically one year after bankruptcy started), you regain control over property acquired post-discharge, but property that vested in the trustee remains with the trustee.
For unaffordable lending claims:
- Lending given before the bankruptcy — the claim vested in the trustee. Even after your discharge, the trustee retains the right to bring it. Redress is paid to the bankruptcy estate, not to you.
- Lending given after the bankruptcy — the claim is yours. The bankruptcy doesn’t affect it.
- Even after the bankruptcy estate is wound up, the trustee can sometimes still pursue claims that vested before discharge, with redress going to creditors via the estate.
Debt Relief Orders (DROs)
A DRO is a simpler form of insolvency for people with limited assets and modest debts. The official receiver runs the DRO, and the position on after-acquired property is similar to bankruptcy:
- Lending given before the DRO — the claim is treated as part of the DRO. Redress may need to be paid to the official receiver.
- Lending given after the DRO has concluded — the claim is yours.
DROs are usually 12 months long. Once concluded, you are no longer subject to the DRO’s restrictions, but the official receiver may retain rights over claims that existed at the start of the DRO.
The Court of Appeal’s position on FOS time limits and bankruptcy
The Court of Appeal’s decision in The Official Receiver v Shop Direct Finance Company Limited (2023) considered who counts as “the complainant” for the FOS time-limit rules where the borrower has been bankrupt. The court did not give a definitive ruling, but the leading judgment indicated that whoever has the right to bring the complaint and the interest in doing so is the relevant complainant. In practice this means trustees and official receivers can be the complainant for pre-bankruptcy lending, with their knowledge and timing being the relevant test.
Practical steps if you are or have been in insolvency
Currently in an IVA
- Tell your supervisor before submitting any complaint.
- They will advise on whether you bring it in your name or theirs.
- Be prepared for the redress to go to the IVA estate.
- If the lending happened during the IVA, ask whether the supervisor wants to investigate it themselves.
Currently bankrupt or in a DRO
- Notify the official receiver or trustee.
- They will normally take over any pre-bankruptcy claim and pursue it for the estate.
- You can still bring complaints about post-bankruptcy lending.
Discharged from bankruptcy or completed an IVA
- Pre-insolvency claims may still belong to the trustee or supervisor — check before assuming the claim is yours.
- Post-insolvency claims are yours; bring them in the normal way.
- For old bankruptcies (more than 6 years ago), the official receiver may no longer be actively involved, but the legal position can be complex — get specialist advice for pre-insolvency claims of substantial value.
Should you still bring a claim?
Even where the redress will go to the insolvency estate, there are reasons to bring the complaint:
- The credit-file correction is yours — adverse markers linked to the unaffordable lending are removed regardless.
- For an IVA, redress paid into the estate often reduces what you have to pay creditors, or may shorten the IVA term.
- It addresses an injustice — the lending was unaffordable, and the lender should account for it whether or not you personally receive the cash.
For lending given after the insolvency event, the redress is fully yours and the normal process applies.
Get advice before complicated cases
The interaction between insolvency and consumer credit redress can be technical, particularly for older bankruptcies, multiple loans straddling the bankruptcy date, and IVAs that have already concluded. Free advice is available from StepChange, Citizens Advice and National Debtline. For substantial claims, a specialist debt or insolvency adviser is worthwhile.
Related guides
- Claiming while on a DMP
- How far back can I claim?
- Do I have an unaffordable lending claim?
- How a claim works step by step
- What if you still owe the lender money?
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