Done something unforgivable resulting in £207,000 debt

lozzam

I would come clean with your dad. If you are at risk of going bankrupt and/or have creditors coming after you, you need to safeguard his money. Getting it back into his name should be top priority, and unless he understands the urgency, he may not react quickly to your requests.

I have lots of sympathy for your position, but it sounds like you need to act fast to get things straightened out.

pete456_2

I can pay my dad back and just say the account has "matured"..... or I can pay it into an account in my brothers name. I've learnt my lesson but to remove any temptation it would be safer with him. He's sensible.

Then I have the £67,000 debt to the banks to tackle, and probably around £10k interest I owe my dad on top. Wow.... How have i managed this?

redpete

I'm a bit confused, you start off by saying you owe your father's accounts £140k...

pete456 wrote: »

... I have used this "fund" to cover me .....and now it's all gone...

but then

...I have at least generated pretty much the same amount back. I'm maybe 15k short, ...

So I don't think you should consider that you owe him £140k, just the £15k plus the lost interest. Don't even consider the £125k that you have access to as yours at all, it is your fathers and should be replaced ASAP. Then start worrying about how to make up the £15k+ that's left and move on to resolving your other debts. You need to transfer the money back into his name ASAP as well, I'm not sure why you thought it a good idea to open the accounts in your name in the first place. I think you need to explain to him that you are in financial trouble and that's why it has to be in his name - this might mean you have to admit about how you have used the money but better to do it now rather than when the OR has taken most of your father's money.

Are you sure you would only get £20k if you sold the shares? At £4k per year dividends that means they yield something like 20% which either means you are very good at picking shares or your numbers are wrong. Anyhow - the amount you receive in dividends is almost certainly less than the amount you pay in interest on the credit cards so I would sell the shares and pay of the cards.

You need to start earning money quickly as well, it might be difficult to get a job you would consider in normal circumstances but these are not normal circumstances.

Good luck.

immoral_angeluk

If you're going to go bankrupt and pay your father off first, this will be seen as a preference

Did the debtor pay one creditor in preference to others

133

The trustee can apply to the court to set aside transactions which the bankrupt person made within the six months preceding the bankruptcy order (two years for transactions between partners or ex-partners, relatives, employers and employees or business associates) if the transaction was intended to improve the position of one particular creditor over others. These types of transactions are called preferences.

134

In order to succeed, the trustee must prove that the bankrupt person made the transaction with the intention of placing the creditor in a better position than other creditors.

135

If the debtor made the transaction in favour of a partner or ex-partner, relative, employer or employee, or business associate, the onus of proof is reversed. This means that the preference of the transaction is presumed unless the bankrupt proves otherwise.

136

Examples of preferences include the following:-

• payments to a particular unsecured creditor but nothing to other creditors
• payments towards a particular guaranteed debt but nothing to other creditors
• giving security for an existing unsecured debt.

137

Payments to secured creditors do not normally count as preferences.

Your dad would of course then find out about it. But you have to bare in mind that the OR will investigate all of your financial affairs and that it will end up coming out that you have done this. The implications are such that the bankruptcy order could be refused or you could be subject to a bankruptcy restrictions order. Either way your dad would end up finding out about it.

FraudBuster

Before going bankrupt check out the implications of "voidable preference" here:

http://www.insolvency.gov.uk/index.htm

Britwife

First and most important thing for you to do today is talk to your dad. I'm glad you have come to your sensus but what you have done is unbelievable. If you have every cent to pay your dad today, then do it.

This whole time he has thought his money was safe and trusted...with his son.

You need to think about how you would feel if you were in his shoes.

I admire you for coming on a public forum and baring it all but I'm just in total disbelief.

redpete

BTW - anything I suggested about transferring the money back to your father takes no account of how this would be seen should you go down the bankruptcy route. But I suspect it will be easier to argue the case if you do so as soon as possible.

immoral_angeluk

You may want to look at an IVA rather than bankruptcy. I've had a quick look but I can't find anything about whether IVAs have the same preference rules as bankruptcy. I'm someone will be able to clarify this as I know you can't preference one creditor over another while proposing an IVA, but I'm wondering about whether it would be possible before (I've got a feeling you wouldn't be able to but thinking aloud..)

Tixy

Sell your shares and pay off the your father in total with the money you have and the share money, transfer it back into his name so you cannot ever access it again - not to your brothers name to your fathers.

Then with whatever remains from the share sale and any money you get from any job you can find or JSA start making token payments to your other creditors. You will get defaults etc but your credit rating should be the least of your worries at the moment.
Find out what other benefits you may get (jsa, housing benefit, ct benefit etc) - if you get a low paid job you may get working tax credits.

Once you have found a job with a reasonable income then you could move onto a debt management plan to start repaying your debts.

Like the others I don't think you can consider bankruptcy without your Dad only getting his pro-rata share of all your own, which would only be £98k or so.

pete456_2

It's going to be hard telling my dad. I'm not sure he needs the worry. He probably would help me and forgive me but I'm not sure it's in his interest.

I know I betrayed his trust but I haven't lost his money, the gamble may not have made any extra money but at least I broke even in a round-a-bout sort of way. It's nearly killed me getting £125,000 back. I'm still a bit short but I am also due around 10K in inheritance this year which I could use to pay off all his money. I want to clear his debt. The banks can wait.

If I get the inheritance and pay him the extra 10K and then go bankrupt or IVA or whatever, will it be frowned upon that I paid him first rather than the banks or is paying family back first allowed and expected?