Money in frozen bank account

Rich1209

Hi
I have recently been made bankrupt. My bank account at the time was in credit to the tune of £4000 which was a loan from my parents to enable me to continue with everyday living and business expenses. The receiver now informs me that they will freeze my account, including the loan from my parents.Do I have any recourse to keep hold of this money.
Any advice would be appreciated.

alastairq

ooops.

You would, I suspect, have to enter into negotiations with the OR over this...
CAn you 'prove' this amount was in fact a 'loan' from parents?

Do you have any other source of income?

If not, then you may have an argument for the OR to unfreeze those assets....

because assets are what they are....and it's assets the OR wants..

JPS29

HI Rich

You say you have "recently" been made bankrupt. How long ago?
The reason I ask is that even if the OR hasn't already informed the bank then as soon as you appear in the London Gazette banks scour this and will close/freeze your account.

With regards to having recourse for keeping the money I would say you are on very shady ground here, just my opinion.

Theoretically:rolleyes: IF the account hadn't been frozen/closed and you still had access to it....

If you withdrew the money and could not account for it you would most certainly end up with a BRO/U
Same as above but you gave the money back to your parents and told them to cancel the loan, this would constitute preferential treatment of a creditor.

It's unfortunate that you are only on here now after bankruptcy as there are some fantastic people on here who could have advised you better ways to do this.

The way I see it the £4k was you safety blanket from your parents, an admirable gesture and I can see why you want/need to keep it to see you through what is going to be a hard time.

The way the OR will see it is that BR is a completely fresh start, wiping away X amount of debt to allow you a completely clean slate. Therefore you shouldn't be allowed to manufacture a safety buffer to ease the process and give preferential treatment to one creditor, whilst having debts written off by others.

Hope that makes sense?

I may be wrong but have a horrible feeling I'm not, unfortunately.

Someone more knowledgeable will be along soon who can advise further. What I will say is please stick around the boards, regardless of the outcome of the 4k. There are lots of other things we can help you with here, before you make any other major decisions/choices

Best Wishes
ITBS

Tinytim

Hi Rich,

As others have said, it depends very much when you were made BR. The worst case scenario is if your parents paid the money into the account prior to your BR, then I suspect it will be treated as an asset of the estate. Your parents would be classed as a creditor along with all other creditors and would get their share of the £4,000 that would be distributed to creditors on a pro-rata basis after the OR had subtracted his fees.

It also raises the question of borrowing money when you were, or should have known you were insolvent, which is a big no no.

It may well be that the OR sees the transaction for what it is, and decides to be lenient as far as the borrowing whilst insolvent rules are concerned, but I would think you would have quite a struggle to get the money back, as the OR would have to justify to your creditors why he was not claiming it as an asset.

Who did you get advice from prior to going BR, and did you tell them that this loan/gift was a possibility? If you did, they really should have pointed out the potential difficulties. The best solution would have been for your parents to pay things for you, or buy groceries or such like if they really wanted to help out, rather than giving all their help in a lump sum, but such is the power of hindsight.

I do hope you get it sorted out.

debtinfo

Hi as the others have said the Money will be an asset in the bankruptcy and will be claimed by the OR. You may be able to argue that some of the money is needed for your essential living expenses and so some may be released to you

property.advert

Surely there has to be some work around for the keeping of cash in pound notes under the bed until BR. That is a security risk though I suppose it could be argued that cash should be put into the BR but everyone knows you pay your rent and utilities before cash creditors.

blind-as-a-bat_2

property.advert wrote: »

Surely there has to be some work around for the keeping of cash in pound notes under the bed until BR. That is a security risk though I suppose it could be argued that cash should be put into the BR but everyone knows you pay your rent and utilities before cash creditors.

After the events of this year, it may it may be more secure than keeping it in a bank:p

Rich1209

Hi all

Appreciate the time you spent replying to my question. Its as I suspected, parent becoming just another creditor that is. Should have thought this through but these situations are what one assumes will never happen so never prepare for.
We live and learn!
Rich

Rich1209

By the way InTheBrownstuff

Not yet frozen - thats a thought but does this not constitute fraud or some such legal threat? If I did that is.

JCS1

Rich1209 wrote: »

By the way InTheBrownstuff

Not yet frozen - thats a thought but does this not constitute fraud or some such legal threat? If I did that is.

Difficult one - when the OR does tell the bank and £4k has been withdrawn then the Bank almost certainly will tell the OR, and you will then have to explain things. If you give money back to your parents, the OR might consider it a preference and ask them to pay the money back.

JPS29

Agree with what JCS says.

What you would have to weigh up is how important is that 4 k to you.
As the account is not frozen you could take the money out and as long as you didnt give it back to your parents, then you are not giving preferential treatment to a creditor.

If you then lost it, couldn't remember what you had done with it, or for some reason jusst couldn't account for it, then you would definitely be in receipt of a BRO/U.;) Remember though, these can last upto 15 years if the OR thinkss your taking the pi ss:eek: