Inheritance

Mismanagement

Hello
OH might inherit a share in recently deceased mothers house.
We have spoken to a solicitor who has warned us that the best way to proceed is to borrow the money to annul the bankruptcy and then pay back the lender when and if he inherits. He has warned us that to pay back the original figure is not enough as with charges, interest and fees we could be looking at double that amount so that our original debt of 25K could skyrocket to 50K !!!
We were tempted to just tell the OR ourselves and let him deal with the estate but the solicitor told us that would end up costing even more as he will appoint an outside IP and the costs will escalate even more
Any advise from anyone would be very much appreciated.
The solicitor also told us that because OH had been BR before that they might want that repaid as well! We thought that after discharge ( and with no restrictions) that was finished with .
Does anyone know if that is a possibility?

NeverAgain_2

Mismanagement wrote: »

Hello
We have spoken to a solicitor who has warned us that the best way to proceed is to borrow the money to annul the bankruptcy and then pay back the lender when and if he inherits.

Did the solicitor say how an undischarged bankrupt can borrow £25,000?

Your last question is not entirely clear, but I suggest you run the situation past the official receiver.

You are going to tell them anyway when the inheritance arrives, so you've nothing to lose.

It's quite reasonable for you to request charges to the inheritance are kept to a minimum.

Charging £25,000 to administer the repayment of £25,000 to a few creditors is way too much.

Mismanagement

The solicitor suggested he borrowed it from his sister who also stands to inherit and has the means to do so. He said this was a better solution as it might avoid some of the charges associated with the OR taking the property and dealing with it himself. ( or getting an IP to do it for him) .
But before that he needs to check if OH has any obligation to pay back first BR . I have read all I can on this and even phoned the Insolvency agency and they say no, as the inheritance came after discharge from the first BR but both our solicitor and another advisor said there were sometimes reasons that the first BR needed to be looked at again. Something about this being a second bankrupcty ( although Insovlvency agency didnt seem to think that made any difference) We are really anxious now as this has been a horrible 5 years and to think we have to go back to the first Bankruptcy is very frustrating . ( HMRC made him bankrupt the second time as we were late with tax payments)

tigerfeet2006

I've put a shout out for debtinfo to see if he can help with this.

debtinfo

hi Tigerfeet

OK where to start.

Generally if it is possible then it is more financially advantagous to you to introduce third party funds(you cant use any assets you already have) to pay for an annullment (ie someone else lends the money) rather than to let the asset to be taken into the bankruptcy and paid that way. The money can come from friends, family etc and there are a couple of companies that will lend to you specifically for this purpose (i dont want to recommend anyone though) although of course their services dont come free.

generally you will have to raise enough to pay the full debts plus statutory interest at 8% plus the bankruptcy fee (about £1700) plus other small OR fees for work already done) there is a small fee to the court as well for the actual annulment.

If the case has already been passed to an IP then you will need to pay those as well which can be large.

If you dont do the annullment yourself with 3rd party funds then those fees will increase significantly mainly the IP one as they will do the work of realising the asset. Also if the asset is realised by the bankruptcy estate then there is also a secretary of state fee which can also be a significant portion of the asset.

so all in all much cheaper to do the 3rd party funds

Finally, if you have been discharged from the first bankruptcy before the death of the family member then you DO NOT have to pay anything towards the previous bankrupty

tigerfeet2006

Helloooooo :wave: Just sent you a PM to see if you could help with the second bankruptcy thing and how the inheritance will be handled. I always thought that the executor/solicitor dealt with the estate and then did a check when everything was finalised and liquid as to if anyone was BR and then paid out to the OR.

ETA: Cheers m'dear, that's brilliant. Obviously my understanding was wrong. You are a star.