Please help!

Bena_Berry

Hi everyone, I've never written on here before but since I went bankrupt last year have read lots and found it so helpful...really hope someone out there will be able to give some advice.

Basically my partner (work and live-in!) and I both went bankrupt when our business failed. We worked so hard to try and make it work but it was just impossible with credit crunch etc. To cut a long story short along the way we borrowed £20,000 from my parents. We could've gone to the bank but decided to take it from them because they wouldn't charge interest and as we had the business up for sale, thought that we would pay them back quickly.

Of course this didn't happen cos we couldn't sell and so we ended up trying to just hold out and pay what we could to whoever was making the loudest noise. A month or so before the bankruptcy we sold my partner's car and some bonds and gave the money to my parents to start paying them back as they needed it. We also sold a house that we rented to pay other creditors and a couple of other assets too.

Now the trustee is asking my parents to pay back the money we repaid them, as he is saying it's seen as a 'gift' as they're related to me and it was just before we went bankrupt. This seems so unfair. We didn't put them before other creditors we were just juggling our debts. Is there anything we can do??? They are lovely people who were just trying to help and really don't deserve this.

Also, I called him today to say all of this and asked if it would affect us being discharged. We are hoping to be discharged soon as we know (through my parents) that creditors have been contacted to put in any objections. We haven't had any IPAs or IPOs made yet though. I've been told that if there are none before the discharge they can't be made once you have been discharged. Is this true? Obviously I don't want to ask him cos it might remind him to do it!

Really appreciate any advice...thanks so much guys x

k2nga

I believe the best thing you parents can do is say they dont have the money and i believe then there is little the trusties can do. Im sure if i am wrong someone will correct me but i also saw this on a recent TV program.

Yes as far as i know you are right if you dont get an IPA or IPO before discharge then thats it as they cannot give you one after.

tight_jock

Not sure how to get round this one as they have obviously taken the view that you have preferentially treated a creditor - albeit family.

Richard_S

Hi Bena,

We borrowed money from a relative and it really does put you in an impossible position. You have a moral obligation to repay the debt, but if you pay anything in the months before your bankruptcy then it's seen as a preferential treatment of creditors by the O.R and they have the right to demand the repayment of those monies.

Your parents can refuse to repay the money on the grounds that they no longer have the funds, but that could well result in you having a BRU/O imposed. Your best bet is probably to keep your head down and hope the O.R doesn't think the amounts worth pursuing, but you won't get any confirmation of the situation until you're discharged. At that point the O.R can't seek a BRU/O unless they've made reresentation to the Court.

You have a balancing act. If your parents repay the money then you'll be in the clear, but you'll have to start from scratch to repay them, or if they refuse then you have to hope that the O.R is too busy to pursue any further action.

For what it's worth, I think I'd be tempted to sit things out and see what happens, and that's an opinion, nothing more.

Best regards

Richard

Bena_Berry

Thanks so much for the advice, seems crazy really because there was nothing dodgy about it whatsoever. We had no intention of going bankrupt and always thought we'd pay them back- which we will still obviously. It's purely because they have the same sirname.
As I said we sold a house and the guy we rented our business property from was also a solicitor, he dealt with the sale and kept the money made on it to cover rent arrears. They won't be asking him for any money back. Yet he was insured for loss of rent, he'll probably make out of all this whereas my parents, who can't afford it, won't. I hope you are right K2nga and they don't get chased for it!
By the way we told the OR about it all from the beginning, have been totally upfront and honest about everything- hope it doesn't blow up in our faces now!
Thanks though for your thoughts x

Bena_Berry

Richard, sorry what's a BRU/O??? Ta xx

k2nga

Well Bena like you say you parents dont have it and like i always say they cant have what you have not got.

tight_jock

Bena_Berry wrote: »

Thanks so much for the advice, seems crazy really because there was nothing dodgy about it whatsoever. We had no intention of going bankrupt and always thought we'd pay them back- which we will still obviously. It's purely because they have the same sirname.
As I said we sold a house and the guy we rented our business property from was also a solicitor, he dealt with the sale and kept the money made on it to cover rent arrears. They won't be asking him for any money back. Yet he was insured for loss of rent, he'll probably make out of all this whereas my parents, who can't afford it, won't. I hope you are right K2nga and they don't get chased for it!
By the way we told the OR about it all from the beginning, have been totally upfront and honest about everything- hope it doesn't blow up in our faces now!
Thanks though for your thoughts x

If the BR was a decision made after the payment by any length of time then it becomes even more of a grey area.

It only becomes a preferential treattment if you are in the position f considering BR whenyou make such payments. IMO.

I`m with Richard...keep your head down
:beer: TJ

Bena_Berry

Thanks k2nga, will pass all the advice on to them. Thanks for taking the time to read and reply, appreciate it. Am off to my be now to get a decent night's sleep, feel less worried now. Have a good night x

Bena_Berry

Thanks TJ too, will mull it all over. Night night guys x

tight_jock

Bena_Berry wrote: »

Richard, sorry what's a BRU/O??? Ta xx

BRO or U
Bankruptcy restriction order / undertaking.
This can extend the length of the bankruptcy by up to 15 years for those who are seen to have been reckless generally...You can check them out on the insolvency service website. :beer: TJ