Bankruptcy discharge and subsequent bequest in a will

In_for_a_penny

Hi,

Please can someone tell me if a person who has been declared bankrupt for 12 months (not me incidentally!), and then during this period of insolvency, being named as a beneficiary in a will with an anticipated inheritance of £xxx's (although no monies have been paid out yet), if the creditors can stake a claim on the monies when the bankruptcy order is discharged?

Thanks

debtinfo

The key date is when the person died, was this before or after the bankrupt was discharged

patman99

I doubt they could. after all, the person making the will may be in their mid-forties, and end-up living until they are 90.

If, however, the person making the will dies within the 6-year b/r period, and the estate pays-out, then that would certainly change things as the b/r person would have a duty to inform his o/r of the change in circumstances.

It's the same if a b/r person wins anything of value in a competition. I once watched a guy pick-up the keys to a brand new car he had won in a competition, only for the o/r to stride onto the stage and take it off of him. Turns-out he was half way through his 6-year period of b/r. If he had entered in the name of his non-driving, non-b/r spouse, he would have got away with it.

JCS1

patman99 wrote: »

I doubt they could. after all, the person making the will may be in their mid-forties, and end-up living until they are 90.

If, however, the person making the will dies within the 6-year b/r period, and the estate pays-out, then that would certainly change things as the b/r person would have a duty to inform his o/r of the change in circumstances.

It's the same if a b/r person wins anything of value in a competition. I once watched a guy pick-up the keys to a brand new car he had won in a competition, only for the o/r to stride onto the stage and take it off of him. Turns-out he was half way through his 6-year period of b/r. If he had entered in the name of his non-driving, non-b/r spouse, he would have got away with it.

Bankruptcy is for one year, not 6. The only time an inheritance would affect after the one year is if there was an IPA and then any interest on sums received could be classed as income.

patman99

Ahh, I thought the term of b/r varied depending on the size of the debt.

JCS1

patman99 wrote: »

Ahh, I thought the term of b/r varied depending on the size of the debt.

No - just the one year, though discharge can be suspended if the person does not co-operate, etc, but these are rare cases.

In_for_a_penny

debtinfo wrote: »

The key date is when the person died, was this before or after the bankrupt was discharged

The deceased person died in December 2010 and the bankrupt person isn't dischrged until April 2011.

Thanks

fermi

In that case, the OR/trustee can most likely claim any inheritance as an after acquired asset.

property.advert

fermi wrote: »

In that case, the OR/trustee can most likely claim any inheritance as an after acquired asset.

And what if the beneficiary simply doesn't tell anyone or makes sure that no monies are received until after discharge ?

There must be some way of making sure that it doesn't get swallowed up.

rozmister

I don't think it's very fair to deliberately conceal a windfall. The person who is b/r spent that money and if they could afford to they should pay it back. After all all those people that they didn't pay back are currently out of pocket. Why should the b/r individual walk away from b/r minted and leave the people who didn't behave irresponsibly shortchanged?

Also if you are caught deliberately concealing the money it is fraud. Part of a b/r agreement is that you declare a change of circumstances and if you seek to conceal the change it's fraud.

fermi

property.advert wrote: »

And what if the beneficiary simply doesn't tell anyone

You would be in breach of the terms of your bankruptcy order. Concealing assets from the OR could at the least land you with a long Bankruptcy Restriction Order/Undertaking, or even lead to prosecution.

property.advert wrote: »

or makes sure that no monies are received until after discharge ?

That wouldn't effect the right of the OR/trustee to claim it. As said, they have the right if the person dies before your discharge. i.e. when the inheritance "devolves" upon the bankrupt. When you actually receive the money is irrelevant.