Section 339 Bankruptcy

johnny77_2

I was bankrupt in October 2005 and discharged in 2006
A sum of £85,000 was transferred by me in March 2002 from my Crirical Illness insurance payment (of £100,000) to my wife, so my estate was not affected.
I am very ill and disabled with Multiple Sclerosis.
I have been asked to prove I was solvent both before and immediately after the transfer, or the solicitors acting for the Insolvency Practitioner have threatened my wife that they will ask the court to make her pay it back.
How can I prove that I was solvent between these dates? Your help would be appreciated, because my wife is also my carer, and it is making her very ill from worry. It is also making me ill and is making my condition much worse. Your help please. Thanks for reading this.

dalip

I really have no idea but would hazard a guess you need more expert help than we can offer here. The only ones i know who may be able to help are debtdoctor or JSC1. Maybe a PM to them might help.

All the best.Dx

fermi

http://www.insolvencyhelpline.co.uk/insolvency-act/p09c5_1.php#339

339. Transaction at an undervalue

(1) Subject as follows in this section and section 341 and 342, where an individual is adjudged bankrupt and he has at a relevant time (defined in section 341) entered into a transaction with any person at an undervalue, the trustee of the bankrupt's estate may apply to the court for an order under this section.
(2) The court shall, on such an application, make such order as it thinks fir for restoring the position to what it would have been if that individual had not entered into that transaction.
(3) For the purposes of this section and sections 341 and 342, an individual enters into a transaction with a person at an undervalue if -

(a) he makes a gift to that person or he otherwise enters into a transaction with that person on terms that provide for him to receive no consideration.
(b) he enters into a transaction with that person in consideration of marriage, or
(c) he enters into a transaction with that person for a consideration the value of which, in money or money's worth, is significantly less than the value, in money or money's worth, of the consideration provided by the individual.

http://www.insolvency.gov.uk/freedomofinformation/technical/casehelpmanual/A/AntecedentRecoveries.htm

viii Bankruptcy transactions at undervalue (section 339) As far as a bankrupt is concerned, the transaction at undervalue must have occurred during the 5 years prior to the presentation of the bankruptcy petition.

Where the transaction took place in the period of 2 to 5 years prior to the petition being presented, the bankrupt must either have been insolvent at the time or become insolvent as a result of the transaction. The burden of proof falls on the trustee to show that the bankrupt was insolvent at that time.

NB: Where the transaction involved an associate of the bankrupt, there is a presumption that the bankrupt was insolvent at the time the transaction took place so that the trustee does not need to prove that the individual was insolvent. An associate can be the individual’s spouse, or a relative or relative’s spouse of either the individual or the individual’s spouse.

Any transaction that was entered into in the 2 years prior to the presentation of the bankruptcy petition can be set aside, as can any transaction entered into in consideration of marriage and there is no need to show that the individual was insolvent. Only transactions entered into for valuable consideration and in good faith will stand. The trustee must obtain sanction (approval) of the court or creditors' committee before making an application under section 339. (Where the OR is trustee, Technical Section undertake the functions of the creditors' committee on behalf of the Secretary of State. The Examiner/B1 will minute details of the transaction to Technical Section requesting sanction.)

A settlement or transfer of property made as a result of a court order on divorce can still be deemed as an undervalue transaction, although where the divorce court confirms the transaction it may become valid.

And read........

http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter31/part4/part3/part_3.htm

But as said, get some expert advice....