As some additional info on this, my sister went bankrupt and also received a very significant redress payment from AIB after sale of properties.
As Jim said, AIB were entitled to keep 30% of it, but allowed her keep it all as an act of good faith. (She was waiting for months for them to make a call on it and eventually they did). To say we were surprised is an understatement.
Although on reflection, I'm assuming the reasoning is they realised her bankruptcy was entirely due to her being overcharged (which was clearly the case) So it makes no sense for them to compensate her - only to receive the compensation back as part of an insolvency. That's not much of a compensation !!
So had she pursued it through the courts i really cannot see how a court would allow AIB keep any of it given the cutcumstances.