Done something unforgivable resulting in £207,000 debt

DarkConvict

I don't think I've seen anyone say this yet.

Paying back your dad would be seen as preference to a creditor i understand, but the dad was not a creditor, he never agreed to invest the money, the dad consider that his money was in his account. As such the money is just 'passing though him', although this could raise some very serious questions non the less when the official receiver looks into the financial records.

When i was younger, my brother opened a barclays account for me, in doing so i was to young to control it so he was on the account also. I was happy the day he gave me £120 as kid would be, my mom quizzed it more and found he was paying me back for the £120 he took out to buy himself a sofa. She was not to happy as you can guess.
Its probably due to that life experience why i must insist you pay your dad back, as he never gave you the money, it wasn't yours to invest and neither is it now yours that you sold the business.

To answer the other question, legally you don't have to tell him. But if he checks up on paperwork and he is still capable in his current age, he will work it out.

DVardysShadow

not_tonight_josephine wrote: »

Please look into things very carefully before thinking of bankruptcy, as i understand it you are not allowed to give preferential treatment to one creditor above another if you're going to go bankrupt, so you may not be allowed to pay your Dad back?

If you have enough money to pay your Dad back as you say, then the amount of debt you're left with can be managed - many people on here deal with similar levels of debt. Post up an SOA as suggested and good luck

Proper legal advice needed on this point - it is tricky. My own view is that the money belongs to the father and was held in trust, with father as owner at all times. I do not think that giving him his money back would be preferential treatment, because father is not a creditor.

pete456_2

Well he transferred it into my bank account from his current account.
I held some in my current account and over the course of the year paid some bills for him with it when he did some work on his house. The rest I split between 2 savings accounts (in my name) with 50k in each.

While it was in my name, certainly the money I held in my current account was still being used by him to pay builders bills etc. He just sent me the invoices to pay them for him.

pete456_2

He simply got scared when the banks started failing and realised he had nearly £150,000 in one bank. I offered to split it over 3 banks with a safe 50k in each which would be covered if the banks collapsed.

pete456_2

The money he gave me wasn't a loan and he wasn't charging me interest. Does this make a difference?

DarkConvict

split it over 3 banks with a safe 50k

FYI, they have to be separate banking institutions not just separate banks. http://forums.moneysavingexpert.com/showthread.html?t=2044049&highlight=institution

pete456 wrote: »

The money he gave me wasn't a loan and he wasn't charging me interest. Does this make a difference?

Not really no, if he was loaning the money and charging interest without a license, your dad would be considered a loan shark, just means lending without a license.
The fact the money was in your name at the time of spending it would probably mean to an official reciever that it was your money, in which case he maybe treated as an unsecured creditor.

If you went BR the 125,000 would be split as follows (rounded up)

£18,218 Unsecured Loan - 9% of 125,000
£49,727 Credit Cards - 24% of 125,000
£140,000 My poor unsuspecting father - 67% of 125,000

You would have to show your dad gave you the money as an informal loan, otherwise they may consider it to be yours, the £140 wouldn't be covered, instead you would be denied bankcruptcy and told to pay the Unsecured Loan/Credit Cards in full, then make up the rest to your dad over time.

pete456_2

Yes they were separate ... although the money didn't stay in there long :-(

pete456_2

So he'd get £83,750..... nope, bankruptcy is not an option. I need / want to pay him back.

I've looked at the unforceability on the credit cards and loans section and there's plenty to read. My credit cards go back to around 2001 - 2005 so maybe something to look into. Egg Card, Egg Money, Egg Loan and Lloyds Trustcard are the oldest cards (and largest debt).

Does sending a template letter raise concerns with the creditors and start a panic? Does it effect your credit rating? Should I apply for some 0% balance transfer cards before I send any template letters to my existing creditors?

Thanks guys

Buffythedebtslayer

I just wanted to say well done for posting

It must be so hard to have to admit it all.

I do think paying your Dad back is the way forward, you can I think manage the rest ? Yes I know I sound mad but seriously read some of the diary threads and remember that yes you have crapped up big time here but it is all a learning experience and you will handle this and learn how to fix it.

So it goes, Dad, Job, reneogiate loan and CCs - do the pound token payment thing for a bit.

Now living arrangements? Could you move back home for a bit (grim as it can be it is at least "safe" ) or your brother? a friend? You have six weeks, a lot can happen

Keep posting

xxxxx

Buffythedebtslayer

I think yes to the applying for the 0% card before the letter thingy. Don't want to be raising any red flags xx