Father Bankrupted by Lowell

Stormcrow23

Hi,

My Father was bankrupted by Lowell in March (Old Capital 1 debt, with BW Legal acting on their behalf). Original amount £1400. My parents have equity in their property so I'm seeking to put up funds in the hope of getting the bankruptcy annulled. I would have acted faster, but they have only recently informed me of the situation now people are coming to value the house.

I have concerns about how legal the bankruptcy is - my Father let slip that they made an offer to him to buy the interest in his debt and he said yes, but didn't hear anything back from them bar being served with bankruptcy. At this late stage I doubt I would be able to get the bankruptcy overturned on these grounds though, and with my Father's record-keeping it is unlikely he kept a copy of the paperwork he sent back to them. I am trying to get my Father to ring them and ask for a breakdown of what they believe we owe them, including the original amount, any charges added, and costs incurred (I assume they will be adding the charge of making him bankrupt to the total). As the primary creditor will they be expecting to get whatever they ask in full or am I in a position to contest any charges that seem unreasonable or try for a settlement? Can I raise a complaint against them after we have dealt with the bankruptcy (as charges will be mounting and may outstrip my ability to produce the capital the longer it goes on)?

In addition, my parents were one payment behind on the mortgage, which I have forwarded them the funds to clear (£556), and had a £3000 credit card bill my Father was being pursued for (not at the court stage), which I'm hoping they can make a settlement on then I'll pay it in full. They have a mortgage of around £30000 - would this also need to be cleared in full to have the bankruptcy annulled (in which case I probably can't raise the finance).

Does anyone have any idea roughly what the fees of the insolvency practitioner to whom my Father's bankruptcy was assigned will be? Apparently he will not give my Father a figure until he has had the house valued. I have spoken with him once, but my Father cannot find a piece of photo ID that would enable me to speak with his authority on his financial affairs (we sent in a signed letter, utility bills etc., but again the dodgy record-keeping won't turn up a passport or photo driving licence). I presume these fees, whatever they may be, would also need to be paid in full to get the bankruptcy annulled.

I am seriously worried about how high the costs of this might spiral, and whether I will be able to raise the capital. My parents have let it get to a very late stage, and don't seem to be moving with the necessary urgency on getting figures etc. to me. I am a single parent in full time employment, joint homeowner (moved in last year), and I can liberate about £5000 up front from emergency savings and my daughter's premium bonds before I have to go begging to the bank. I have some debts of my own - a £1700 bank loan I'm paying off at £589 a month, and about £8000 in credit card debt currently on 0% balance transfer deals (all from costs incurred in the house move). My own debts are under control - no missed payments, ever - and should continue to tick over providing I don't sink totally under the weight of my Father's bankruptcy, but I'm not starting from a clean slate here so probably wouldn't be able to raise finance in the tens of thousands up front.

Any advice gratefully accepted - feel like I'm stumbling around in the dark here having to move to bail them out with no idea how much I will be expected to pay.

fermi

Would have to clear all their unsecured debts and pay the BR costs/fees in full as you have obviously worked out. Outstanding mortgage would not have to be paid off assuming you prevent sale.

IP fees spiral very very quickly and you could be looking at many £1,000s just for those even if they don't actually have to progress to sale of the house.

You could have looked at disputing the debt, the bankruptcy petition/SD service, but that becomes increasing difficult the longer it goes.

Have you spoken to somewhere like National Debtline? Have they? Tel: freephone 0808 808 4000

While they can't give legal advice, they may be able to signpost you/them and help work out whether this was all done properly and/it is disputable. Lowell and BW legal don't exactly have a reputation for sticking to the rules or correct procedures in these things.

fermi

Not sure if anything helpful in this link ---> Made bankrupt by Lowells

Stormcrow23

Thanks for getting back to me! Yep, it is the IPs fees I'm dreading, particularly as the IP won't disclose these until they have all the assets valued. That and any further padding by Lowell. I will see if national debtline will speak to me - nobody else will without my Father's authority, unsurprisingly, and unless he turns up his passport or similar we are one piece of ID short of me being able to deal with them direct.

I forwarded my Mother the money to clear the late mortgage payment this morning, before it hits the radar. I have asked her to ring national debtline and get some advice on making a settlement on the (joint) unpaid overdraft. We are currently stumped on getting a breakdown of what BW Legal / Lowell are placing the debt at - they aren't answering the phone, and the IP will not discuss figures with Dad until his assets have been valued. I have asked Dad to locate any paperwork pertaining to this and have a good look at the figures if we can obtain them, but I fear he has left it too late. Would it be a lengthy process to contest the legitimacy of the bankruptcy? I presume we would need some hard evidence on our side which we might not have. On the other hand the IPs charges will be racking up. I think I'm doing the best I can by paying down any other outstanding debts and ensuring they are up to date on the mortgage.

Good to know the mortgage can stay as is, if we can prevent sale, as I don't think I can raise credit to the tune of £30+ grand.

tigerfeet2006

Who owns the house? Father and mother or just father. Is the £30k the full equity?

d123

tigerfeet2006 wrote: »

Who owns the house? Father and mother or just father. Is the £30k the full equity?

I would presume the equity to be significantly higher than £30k.

The £30k mentioned is the current mortgage.

Stormcrow23

My parents are jointly listed as owning the house. It hasn't been valued in a while, but yes, there would be significantly more equity in the property than the debts and mortgage. It is currently undergoing some restoration work, but once that is completed it should be worth a lot.

I got on to national debtline as suggested. They didn't seem quite equipped to deal with my situation and referred me on for legal advice, but they did mention applying for a stay of proceedings under 6.208 of the insolvency rules 1986. I'm applying the sharp pointy stick to my parents to do that ASAP on the grounds that we are definately seeking an annulment. Hopefully that will put a check on the IP's fees and stop them progressing the bankruptcy. Apparently the IP has to disclose the amount the creditor is asking for and name their fees if we move for annulment.

I got my mother to negotiate on a final settlement for the outstanding overdraft. National debtline advised that she could do that as she is jointly named on the account with my father, but said they wouldn't drop it by much. In a series of 3 phone calls she has managed to talk them down from £3076 to £2100, so a saving of £900 or so there. Should I consider this a win? Given the situation with the bankruptcy I don't want to push it too far and end up having to clear the full total, unless they really should be settling much lower than this. They said they will send out a letter, which I will obviously scrutinise and compare to the standard letters on the national debtline site - if it doesn't sufficiently protect them we can always send our own.

Another debt has emerged - court fines for driving uninsured at around £1200. My father has been paying this off on a monthly basis, but I assume I will need to pay it in full. I'm assuming the courts will not be prepared to drop the amount if it is fines?

That leaves us with (drumroll) the original debt Lowell bought up and petitioned for bankruptcy on, with the associated court fees and the fees of the IP assigned to the bankruptcy. It all rests on this really, once I know the amount. I would love to get it overturned - as previously stated, I think Lowell have acted badly here. As I said, they offered for my father to 'buy back their interest in the debt', to which he agreed then heard nothing until the bankruptcy. It all sounds a bit odd, and I'm wondering if they used this as acknowledgement of the debt to press for bankruptcy once they established there was equity in the house? However, I'm not convinced we will have sufficient evidence on our side to fight them on this. Rest assured I will be looking very hard at the figures and any information / paperwork I can lay my hands on at this stage. We will most definately be registering a complaint against Lowell but it might not save us at this point. So, any advice? Can I negotiate at all assuming I have to buy my father back out of bankruptcy, or do I just have to hand whatever money is asked for over in full?

Thanks for listening, and the advice given

Flyright

All your father's debts are included in the bankruptcy. As such you cannot make attempts to pay them off unless it is following annulment on the basis of payment in full.

fermi

Magistrate's fines are excluded and not written off in bankruptcy, so if one of those then this falls outside the BR and has to be paid off whether the BR is annulled or not.

Joint debts remain the responsibility of the non bankrupt signatory, so yes, your mother is liable and can pay that off no matter what happens with the father's BR.

If the BR order should never have been made, then could I think be set aside or annulled on those grounds, but if paid off in full it is just annulled I think. Application to the court required for both/either I think?

fermi

Stormcrow23 wrote: »

I would love to get it overturned - as previously stated, I think Lowell have acted badly here. As I said, they offered for my father to 'buy back their interest in the debt', to which he agreed then heard nothing until the bankruptcy. It all sounds a bit odd, and I'm wondering if they used this as acknowledgement of the debt to press for bankruptcy once they established there was equity in the house? However, I'm not convinced we will have sufficient evidence on our side to fight them on this.

As a full and final settlement to clear liability?

Unless a settlement was agreed in writing by both parties and payment of the settlement sum was made as per thsoe terms, then I think you may not be able to rely on that to overturn the BR. Worth digging though.

fermi

Regards legalish help, as well as formal advice there are a few other forums who specialise in defending claims, helping overturn BRs by people like Lowells etc.

One --> http://www.legalbeagles.info/forums/forumdisplay.php?64-Debt-Collection-Agencies-Bailiffs-and-Enforcement

Two --> http://www.consumeractiongroup.co.uk/forum/forumdisplay.php?170-Legal-Issues

Quite a few people on those who have taken on and beaten Lowells and the like.