Bankruptcy question

allan7710

If I go bankrupt will my bank statements be examined and every debit/credit be questioned? And also, how many years bank statments will I have to provide/they will need to go through?

skylight

Yes - the OR will check over every bank and credit card statement and will query what they dont like - not every single pence of expense. They can go back as long as they like, but usually its only the last few years; also if you dont have copies then don't worry as the OR will contact the lenders directly for them anyway.

allan7710

Thank's for your help but what do you mean by what they don't like? Also, I live in Scotland and I may get the simpler bankruptcy (ILAL or something can't remember what it's called) would I still have to go through all of that with the checking of my bank statements? It just seems so humiliating :-(

skylight

Exactly that - what ever they dont like. It can be a million and one things - like too much money going to the bookies or unusual and odd amounts being spent to somewhere the OR doesn't recognise. The OR will be checking that you haven't diverted funds over the years in the run up to BR, or been spending money on a credit card in Tiffany's that your level of income had no way of paying back. And so on, like I said, there are a million and one things!!

As to humiliating, you try explaining away a subscription to Red Hot TV that my (now EX) OH thought would be funny to sign me up for a couple of months before my BR under the pretext of it being a simple magazine subscription for something else .............. (And the channels weren't that good either :rotfl:)


BR isn't great and it does feel horrible having to bare your soul almost for the OR to see. But the OR has a job to do and has to ensure that everything is fair, not just for yourself but to the creditors as well. Its one of those things you have to grin and bear.

williams1407

I was forced to go bankrupt last year as I owned my own company which was LTD. The company closed as I sold the data base but a company I owed money to said I was a sole trader and changed all their invoices to suit them, making me liable. - owed them 50k and 20k to other bills etc. The OR was pretty abrupt with me in the meeting and took all my bank details etc. They couldn't have checked them too closely as I moved a bit of money without being noticed.

allan7710

skylight wrote: »

Exactly that - what ever they dont like. It can be a million and one things - like too much money going to the bookies or unusual and odd amounts being spent to somewhere the OR doesn't recognise. The OR will be checking that you haven't diverted funds over the years in the run up to BR, or been spending money on a credit card in Tiffany's that your level of income had no way of paying back. And so on, like I said, there are a million and one things!!

I thought the whole point of going bankrupt was proof enough that you have mismanaged your money! I'm worried because 18 months ago I had some plastic surgery done (more for health reasons that cosmetic reasons, but I'd rather not go into it on a public board) anyway, I was better off at the time cos I got a big back payment from tax credits and I used that to pay for it. I'm worried that this could cause me problems. Also, my husband used to get his wages paid into my account (I used to work in a bank and before internet banking was available I sorted out all the bills while I was at work) he has stopped doing this now but still he did it for years. What do you think they would say about all of that?

allan7710

also if I was to get an LILA (found out the right name) would I still be subject to this scrutiny?

skylight

If you were solvent at the time and able to make repayments then it shouldn't be a problem. You have purchased something with the intention of paying it back and at the time you were able to. The OR would only treat this as a problem if you were so far in debt at the time, you never had any conceivable way of repaying the money or had no intention to. The OR is aware that you have had a life before hand and most of us lived it well and within and means (ish!)

As to your OHs money, what he does with his money is entirely his business and not the ORs (unless he goes BR too!). He can have his money paid into whatever account he likes. So tell the OR as it is; your OH used to have his wages paid into your account but he no longer does.


Some people mismanage on purpose, to get great things out of life, hide them and then go BR with no intention of ever paying them back. I am not saying its a popular course of action but it certainly is not rare. The OR is an independent in the process and has to be fair to both us and the people we owe money to. If someone owed you lots and went BR you certainly would want to know why and its the ORs job to discover all this.

skylight

allan7710 wrote: »

also if I was to get an LILA (found out the right name) would I still be subject to this scrutiny?

Yes. Everyone is subject to this. Its part of going BR. We cannot borrow money and simply say one day that's it, I am chucking in the towel, and have no-one question why they aren't getting their money back.


Try not to panic over it too much. Your bank statements are not public documents so the OR does not release them to anyone else. Your creditors will not know their contents nor see a copy. They will get a broad outline that (for EG) You were employed on £x per annum, borrowed £xx, lost job on X date, unable to repay monies etc.

coolcait

allan7710 wrote: »

also if I was to get an LILA (found out the right name) would I still be subject to this scrutiny?

Yes, it's possible. LILA is one of the ways to make yourself bankrupt in Scotland - it's a way into bankruptcy if you like.

But, once you've been made bankrupt, it's a bankruptcy like every other one. Your Trustee (OR equivalent) has the right to examine your bank statements etc.

It may not happen in all LILA cases, but you have to be aware that it is a possibility.

If the Trustee does ask for bank statements etc, skylight's advice (as ever) is spot on. If you're asked a question, tell it as it is. That's always going to be your best approach.

Good luck.

allan7710

Thanks Skylight you have been very helpful. If I was going down the bankruptcy route my husband would be too so don't know how that will effect his wages previously going into my account. As for the extra payment from tax credits would they contact the tax credits for verification? Not sure if bankruptcy is the right option for us, got an appointment with the CAB on Monday but I have all these questions flying around my head and sometimes it's just easier to ask them annonymously (less embarrasing) and helps me prepare for what the CAB will say.