Can they make me bankrupt?

grocerjack

First of all apologies if this is the wrong forum, but reading through it there does seem a wealth of experience so someone may be able to help.

Last year through a very complex set of circumstances and some id fraud, my wife was made bankrupt. I was not involved in anyway and have not been named in any of the proceedings. During the whole thing. My wife had legal representation throughout this sorry affair, and the fees were part funded by someone else involved in the case (in fact a now former friend who conned her and had played a significant part in the dealings leading to the bankruptcy). During this time I acted as no more than a supportive partner and although I did talk to the solicitor I did so because my wife was too traumatized to do so. There were 3 hearings of which I attended 2 and her sister also attended.

After the bankruptcy my wife declared the solicitor to the OR as a creditor. Her case is now with an insolvency practitioner but the information and creditors list remains the same.

Well, now the solicitor is coming after me for the princely sum of £13k for the outstanding fees. There has never been any written agreement between me and them to cover any fees, and in fact although I did receive emails from him, they were very much as an intermediary for my wife. They have now said unless I pay the full amount by June 24th they will issue BANKRUPTCY proceedings against me!!!

My gut feeling is they have no case....I could pay the amount by selling all my shares, putting my bonus in and some money due from an accident compensation claim, so the money is there....but my argument is that it's not my debt. They were representing my wife and not me (as I said I was not involved in any way) and she has declared them as a creditor.....can they chase me, a 3rd party for a declared debt on my wife's insolvency? Can they declare the debt to be mine without any written agreement from me? I have had no client care or retainer letter and they have certainly never had anything from me in writing accepting responsibility. The actual solicitor seems to have construed my involvement as a verbal agreement to cover the costs. It's also worth noting that the solicitors acting for the company that petitioned my wife has stated that in their opinion my wife never stood a chance of winning the case from the outset and that she had been given false hope by allowing them to represent her.

I have yet to reply to them but have talked to the CAB (they made the point about the 3rd party being chased for a declared debt and that the solicitors should only be dealing with the insolvency practitioners). I'm also seeking advice from our employee assistance scheme. My worry is that if I need legal representation then it will cost me a huge amount of money and anyway, how likely would it be for a solicitor to represent me against another firm of solicitors over a disputed fee? I don't wish to be rude but it seems quite an incestuous industry and after seeing my wife's experience from last year I'm not sure I trust them to do the right thing by me anyway.

If this goes ahead then I'm worried that I'll lose everything on the basis of a debt I did not agree to be liable for.

Anyone have any advice or comments?

*Note for mods...if this is the wrong forum please feel free to move it*

pelirocco

bumping this up

curly04

This is a difficult one and I don't know

The paper work your wife signed do you still have this, have you read the small print?

bat-out-of-hell

A verbal contract 'CAN' be held binding by a court, but is near impossible to prove, normaly it hinges on the ballence of probabilaty, for example, if you recieved a service or goods of some desctription, then the court would have to take the view in all probabilaty you did agree to something in return.

However as you where not party to the case, or being represented, and in no way instruct the solicitors to act on your behalf, only to pass on instruction from there client, i think they will strugle to build a case, as you personaly niether recieved any goods or sevice directly.

bat-out-of-hell

By the way, have they formally served you with a statutory demand yet, they must before issuing a petition for your bankruptcy, which you can apply to be set aside on the grounds it is not your debt, so you are a long way from actually being petitioned for bankruptcy if they have not served a statutory demand on you yet.

grocerjack

bat-out-of-hell wrote: »

By the way, have they formally served you with a statutory demand yet, they must before issuing a petition for your bankruptcy, which you can apply to be set aside on the grounds it is not your debt, so you are a long way from actually being petitioned for bankruptcy if they have not served a statutory demand on you yet.

Hi, first of thanks to everybody who's responded thus far, its a great comfort to know such a well informed and helpful community exists.

I haven't had a statutory demand yet, just a copy of a Statutory Demand document (form 6.1?) which has been completed by them - this was sent as an email document attachment. He has attached a letter dated 21st October 2009 addressed to me stating that the debt is mine. I'll hold my hands up and state now I deliberately ignored this as the fee debt had been declared by my wife to the OR and IP. So maybe I'm too blame for ignoring this but I also felt that any further involvement or communication might imply my liability.

Here's the email that accompanied form 6.1, the previous October letter and PDF scans of the bill - all opf which are in respect of my wife i.e her name is on the bill statements and NOT mine.

' Further to my open email today (and you unfortunately not getting back to me on my emails at the end of April 2010 despite what seemed to be an encouraging conversation with you shortly before that) this is just to confirm that our accounts department could not hold back any longer on the enforcement of your guarantee to us. Our outstanding fee notes in this matter date back to June 2009 and for a period dating back to May 2009. The disbursements element includes barrister and court fees. As you know we only represented Helen at the hearing on the afternoon of 25 September 2009 on the back of your personal guarantee. You have also fairly recently indicated to me that you may well be able to make 2 fairly quick payments of around £5k each. I do still think that it might be possible to get our accounts department to accept a small reduction in the amount due but time is rapidly running out and they will be expecting a bankruptcy petition to be issued on 25 June 2010 if this matter has not been resolved by then.
As ever do ring if you need to talk any of this through and I very much hope that we can now resolve this.'

This conversation is very much a version of events from his perspective - at no point did I say any payments would be made - in fact I made it pretty clear the debt was my wife's and he should be dealing with her.



He has now emailed me to ask me to call him to discuss it. I really don't know what to do.

grocerjack

bat-out-of-hell wrote: »

A verbal contract 'CAN' be held binding by a court, but is near impossible to prove, normaly it hinges on the ballence of probabilaty, for example, if you recieved a service or goods of some desctription, then the court would have to take the view in all probabilaty you did agree to something in return.

However as you where not party to the case, or being represented, and in no way instruct the solicitors to act on your behalf, only to pass on instruction from there client, i think they will strugle to build a case, as you personaly niether recieved any goods or sevice directly.

Correct - I never personally received any goods or services from them as I was never being petitioned for bankruptcy, therefore I didn't need a solicitor. He seems to have construed my conversations with him as a guarantee of payment from me, and yet it sits with the IP. My wife is trying to contact the IP to confirm they are dealing with this and if so he/she can tell this firm to go away. ,

JPS29

Hi Grocerjack.

Where did they get the 2 x 5k payments from if it is all from their recollections? Are you sure you haven't signed or agreed to anything. I'm not having a dig, it's just that I have issued personal guarantees before and they needed written confirmation.

I just know how easy it can be to forget things during BR and court proceedings etc.

grocerjack

JPS29 wrote: »

Hi Grocerjack.

Where did they get the 2 x 5k payments from if it is all from their recollections? Are you sure you haven't signed or agreed to anything. I'm not having a dig, it's just that I have issued personal guarantees before and they needed written confirmation.

I just know how easy it can be to forget things during BR and court proceedings etc.

Hi - he proposed this at the final hearing - my response was that my wife was dealing with the fees and that was that. I did agree that staggered payments would be easier, but this was not meant to implicate me as being liable. It was a very stressful day and a very alien environment so its very hard to recall exactly what was said between us, but even if I did say 'OK' to that I'm bemused as to how that can stand as a contract in law. I wasnt even going that day as it was obvious the game was up and any more attempts to defend her position would be fruitless and hence a waste of money. I went in the end because quite frankly she was in pieces and like any dutiful partner you want to be there for support.

Like I say, I could possibly get the money together but that would be every last bit of my savings and everything....and for what? She was made bankrupt and since then I've done nothing but fight to keep the family together and give her support as she tries to rebuild her life.

This really would be the end of everything for me and for us.

And I knew you weren't having a dig

peachyprice

grocerjack wrote: »

' Further to my open email today (and you unfortunately not getting back to me on my emails at the end of April 2010 despite what seemed to be an encouraging conversation with you shortly before that) this is just to confirm that our accounts department could not hold back any longer on the enforcement of your guarantee to us. Our outstanding fee notes in this matter date back to June 2009 and for a period dating back to May 2009. The disbursements element includes barrister and court fees. As you know we only represented Helen at the hearing on the afternoon of 25 September 2009 on the back of your personal guarantee. You have also fairly recently indicated to me that you may well be able to make 2 fairly quick payments of around £5k each. I do still think that it might be possible to get our accounts department to accept a small reduction in the amount due but time is rapidly running out and they will be expecting a bankruptcy petition to be issued on 25 June 2010 if this matter has not been resolved by then.
As ever do ring if you need to talk any of this through and I very much hope that we can now resolve this.'

What personal guarantee is he talking about? Did you sign anything before the court case giving your personal guarantee, or was this a verbal agreement? It would be unsual for a lawyer to accept a personal guarantee with nothing in writing, are you sure you didn't sign anything at the time of the court case?

JPS29

That was my point. PG's are VERY binding so I have never heard of one being a verbal contract only. That's not to say that a verbal one isn't enforceable, just in my experience of them (I've had a few) they have always been written, and very explicit in their obligations. I feel for you mate as I know how things can go fuzzy whilst dealng with the BR and through the courts. If I were in your shoes I would contact the solicitor BEFORE they issue BR proceedings asking them on what grounds they believe they have a PG fom you. If they say written ask for a copy of it, If they say verbal then it "may" be your word against theirs. Keep us posted pls and good luck