OR Seeking re-payment from my friend & family

phoebe_cat

I was made bankrupt in January and had my OR interview today. I had borrowed money from my Mam and a friend some time ago, their circumstances changed and they needed the money back earlier than they thought. I took out a loan in October and used some of this to repay them (£2.5k and £9.5k each). The OR has told me that this is classed as preferential and they will seek to recover the money from them. I have looked around and found that this is the procedure, but not how they go about getting the money back. I was lent this money in good faith and now my Mum and friend are going to be out of pocket because of it. How likely is it that they will be "forced" to repay this money? It is so wrong that they will have to suffer for my position, I've not stopped shaking since I was told. I don't know how I'm gonna tell them that this is gonna happen to them.......

mazzatee

Hi Phoebe

Sorry to hear about this and no wonder you are shaking!

As I understand it yes they can ask them for the money back but if they don't have it then it will be dropped - they cant make them repay money they don't have.
However you could have a bankruptcy restriction placed on you but as your credit rating is ruined for 6 years this won't really have much effect on you!

philnicandamy

They cant be made to pay what they've not got

phoebe_cat

Thanks for the quick reply.

In the case of my friend, then she doesn't have the money, as far as I know it went on Christmas for the kids and other than that they live month to month. My Mum on the other hand does have the money. She is a pensioner and it is part of her life savings, would really pursue it and take it off her?

JCS1

You may get an IP appointed as your trustee as there are potential assets of over £10k.

They can pursue your Mum and your friend, if they have the money the repay the OR, get listed as a creditor, and then if any money left over after paying BR costs then they would receive x penny in the pound as a return.

Merry_Gentry

Do they have to prove that they don't have the money???

JCS1

Not sure to be honest - I used to send letters out for smaller amounts, await a reply and then discuss with AOR to see if any further action.

Given the amounts involved, I suspect there will be more chasing involved - and if it does go to an IP, they will be looking at the monies being recovered to fund their fees.

Merry_Gentry

Thanks JCS, just wondered what the process would be if someone basically said 'No, I haven't got it' - how the OR would go about arguing that.

JCS1

I believe ultimately it can go through the courts system, but given the costs and time involved believe this is rare.

fiveyearplan

Hi Phoebe - its such a shame you didn't find this site sooner then you would have known not to say you paid them back - anyway I suppose hindsight is a wonderful thing.

I don't think they can be made to go into debt to repay.

Summer1969

phoebe_cat wrote: »

I was made bankrupt in January and had my OR interview today. I had borrowed money from my Mam and a friend some time ago, their circumstances changed and they needed the money back earlier than they thought. I took out a loan in October and used some of this to repay them (£2.5k and £9.5k each). The OR has told me that this is classed as preferential and they will seek to recover the money from them.

I know its not quite the same but I took out loans for OH a couple of years ago as he was paying stupid rates of interest. When I went BR, OR told me that could be seen as preferential payment and he might have to pay it back. I was in shock! He didn't have that money so I really panicked for a while. But in the end, I didn't get a BRU and it wasn't mentioned so I am keeping everything crossed for you.