Urgent advice sought - please help

tadsa

Please help me - we have a court date set for next Tuesday and I have just been browsing the bankruptcy forum and have spotted something that is concerning me a great deal.

My mum borrowed money on my behalf 2 years ago and put it into my account. I have had a standing order going out to her ever since for the repayment amount. I cannot drag my mum into my bankruptcy.

What will the OR say about this - is there anything I can claim that it was for so that they won't try and get it back off her. Can I say that she gave us the money and then try to claim that I'm simply paying her an amount per month for something else??

Please help me - I cannot believe that this could be an issue and I'm absolutely terrified.

I wasn't intending to mention the loan from my mum at all but it will be clearly there on my bank statements.

PLEASE reply quickly. Please help.

Tinytim

Tadsa, this is a slightly difficult one to answer. Certainly, if you had recently paid your mum a lump sum, it would be classed as preferring a creditor, and there would be every chance of them asking your mum to repay.

However, if the standing order started immediately the loan was taken, and the amount of the standing order is approximately the same as the loan, then I wouldn't have thought you would have a problem, at least while you were still making payments to other creditor. If you stopped making payments to other creditors, or reduced them considerably, whilst still paying your mum in full, then the OR may potentially have a problem with it. Of course, asking your mum for repayment, and her actually having the funds to repay are two different matters. If she has already spent the money, (which she obviously has, on the loan repayments), then it is not available to be repaid.

Whatever you do, you need to be completely honest about it. It seems that those who get into most trouble are those who try and muddy the waters and hide/not mention things. Personally, I continued to pay one creditor in full whilst making token payments to others. My OR questioned me about it during my interview, and I explained that my business debts were with the same institution, and I was trying desperately to stop them pulling the plug. The OR said he thought this was perfectly understandable in the circumstances.

Unfortunately, you are unliely to be able to keep your mum from being involved one way or another. Even if she is simply classed as a creditor, the OR will send her the same report which is sent to all creditors.

I hope this helps

tadsa

Thanks for the quick reply.

I have continued paying bank loans, credit cards etc but have not paid tax and VAT that is due (self employed). All utilities have been paid inc Council tax, Telephone, Gas, Electric etc.

The loan from Mum is secured on her property. Any further advice? Or can anyone else shed some light on this.

debtinfo

how long have you not paid tax and VAT for

tadsa

No VAT for over 18 months. Still owing tax from 07/08 return which should have been paid in January 09

debtinfo

I wouln't want to worry you but this can be seen as trading to the detriment of the crown particularly if you have been trading for a number of years and stop paying crown debts so that you can keep other trade debts happy