Bankruptcy - what to do about creditors u have paid?

Shiku_2

Hi guys, just got my court date for the 16th of April...... very daunting...... Just wanted to find out do I stop paying my creditors straight away? Also, what will happen with the money that I have paid over the past few years, as I mentioned I have paid off about 3 of my creditors with lump sums i.e. other then the pro rata payments, this totals to around 11-12,000...... can/will the OR reclaim this money and distribute it amongst my crediotrs evenly? Also, i'm in the process of paying off another creditor to whom I have paid 3k in december 08 and now they want a further £250 from me in order to deem the account as partially satisified and close it down......not sure what to do?

Lost2

I stopped all payments, I would not pay the £250 there asking for as that will be part of you BR

Shiku_2

Thanks for the response Lost2.... are u currently br? how long ago did u go br? How's it goin for you? With the court date set in stone I feel like i'm in limbo.....

sandraroffey

dont pay another penny to anyone. OR will deal with everything.

sandraroffey

it will all happen very quickly although you will still get letters from creditors for many months after you are BR.

just give them the ORs address and your bankruptcy number. do not phone anyone!! do it all in writing by recorded delivery.

if you behave yourself and do as OR tells you to do, you should be discharged in a year. maybe sooner.

Shiku_2

Sandra.... 'discharge in 12 months maybe sooner' sounds like music to my ears...... would there ever be a circumstance when the judge will not grant the BR?

sieve

Shiku wrote: »

Sandra.... 'discharge in 12 months maybe sooner' sounds like music to my ears...... would there ever be a circumstance when the judge will not grant the BR?

Yes, if they do not believe you are insolvent, they won't grant the order.

If you are genuinely unable to pay your debts, then you have absolutely nothing to worry about

debtfreenewbie

HI Shiku,my dh is going bankrupt in may and Im doing all the paperwork.You send like you are in a a panic. This is so hard to do isnt it.
Thank god for this site and the guys on here.

Take a deep breath.

skylight

Hello there.

If you are definitely going BR, then stop paying ALL your creditors. Its a waste of money, thats your money that you can save up to pay for the BR fees. You cannot pay any of them as it may be construed that you are favouring one creditor over another - ORs don't like this and get a bit miffed. You are too close to BR - you have booked the court date so you are knowingly insolvent now. Paying any creditor will not be favourable with the OR.

Any monies that have already been paid to service debts cannot be reclaimed by the OR.

What may happen is that when you do an SOA detailing your income and outgoings, the OR may feel that you have a surplus and are able to pay a % of that surplus (starts at 50% if you have £99 free) and you will pay towards your BR estate in that way - an IPA - Individual Payment Agreement. So do not be stingy on your SOA; this one is not about what you can pay (as in a DMP or IVA) but how to live life without credit and any problems comfortably. Thats the irony in BR compared to paying back the debt - you are allowed to have a life.


A judge will only refuse a BR petition if you are not insolvent (so if you have a property with more equity than you owe then you are not insolvent for example) and may possibly turn you down if you ave not taken BR/debt advice from on the the charities (CCCS or Payplan for example). BR is a big undertaking and the judge needs to know that you are aware of the outcome and how it can affect you for life.

dvs

Shiku wrote: »

Just wanted to find out do I stop paying my creditors straight away? Also, what will happen with the money that I have paid over the past few years, as I mentioned I have paid off about 3 of my creditors with lump sums i.e. other then the pro rata payments, this totals to around 11-12,000...... can/will the OR reclaim this money and distribute it amongst my crediotrs evenly?

Stop paying creditors immediately. Save any money for bankruptcy fees and life post bankruptcy.

You will need to make it clear that you never intentionally gave preference to any creditor when making those lump sum payments. If you didn't know you were going bankrupt, then all you were doing is trying to minimise your payments. It would make logical sense that you would pay accounts with the highest interest etc. It's unlikely that the OR will try and reclaim the money from the creditors you have paid.

Make sure you apply for a new bank account with Co-operative or Barclays and remove money from your existing account before bankruptcy. Do not make any withdrawals from existing accounts post bankruptcy unless you have permission from the OR.

Shiku_2

Thank you all for the words of support, honestly means alot as my family are not aware that I am about to go through with this.... would I have to include the creditors that I have paid off over the past few years on the SOA even though I currently owe them nothing?