BRO/U and inheritance

TheGardener

so I now understand Jaffa45 - Thanks

aurion22

fermi wrote: »

Makes no difference. The OR can only claim an inheritance if the person passed away (relative or not) before you are discharged.

If they passed away after discharge, then they can't claim it and you don't have to inform them. A BRO/U does not prevent you being discharged, so has no effect on this.

If this person has not been discharged, or was not discharged when the person died, then they have to inform the OR. Later BRO/U or not.

Just for clarification, the money will be coming from a Trust Fund set up many years ago and only due to be paid out on the death of the relative who has recently died. Does that make any difference? My friend says he was told by another solicitor that the money isn't income so can't be taken by the insolvency people. I hope that's true but I can't find it online.

longtermplanner

No I can't see that makes a difference. Whether it was from the estate of your relative or a trust fund, the fact is that you became entitled to it on the death of your relative.

This money isn't 'income' so an IPA is not relevant. Instead it is what is called "after acquired property" see http://www.insolvencydirect.bis.gov.uk/casehelpmanual/A/AfterAcquiredProperty.htm

What matters is the date of your relative's death. Was this before or after your bankruptcy? If after, was the death before the date of your discharge?

aurion22

The person who stands to inherit (not me) is still subject to the BRU which runs until 2017.

fermi

aurion22 wrote: »

The person who stands to inherit (not me) is still subject to the BRU which runs until 2017.

As said 2 or 3 times already, A BRO/U does not make any difference.

aurion22

fermi wrote: »

As said 2 or 3 times already, A BRO/U does not make any difference.

Sorry, fermi, just checking that I've understood so I can pass on the bad news: any inheritance received by someone who is bankrupt has to be declared even if it came from a Trust Fund .. is that right?
Thanks for your help.

lilybankrupt

aurion22 wrote: »

The person who stands to inherit (not me) is still subject to the BRU which runs until 2017.

Here's my understanding of the various bankruptcy bits.

Let's imagine your friend was declared bankrupt on 1st January 2013.

He should be discharged on 1st January 2014.

Whether he has a BRU / BRO or an IPA is completely irrelevant, these last beyond the discharge date and are separate.

In this example, if the relative died before discharge, ie between 1st Jan 2013 and 1st Jan 2014 then the friend must declare the money. If the relative died AFTER discharge - in this example 2nd January 2014 onwards - then they do not have to declare it.

Note that when they actually receive the money is not the important bit, it's when they became entitled to it - the day the relative died.

aurion22

The BRU is in force until Feb 2017. Does that mean that my friend is still bankrupt until that date or is there a separate date of discharge from bankruptcy?
He was declared bankrupt in 2011 so is he officially discharged now?
That would be very good news!
:-)

lilybankrupt

There is a separate discharge date, and this is the important one in your friend's case.

If the discharge date is before the relative died then he's fine, if the discharge date is after the death he's not.

As others have said ignore the BRU, it's not relevant!

aurion22

Just found this:

It should be remembered that a person subject to a BRO or BRU is still discharged from bankruptcy and the provisions of section 307 regarding after-acquired property do not apply post discharge, notwithstanding the restrictions imposed on them as a result of the order or undertaking.
http://www.insolvencydirect.bis.gov.uk/casehelpmanual/D/DischargeFromBankruptcy.htm

That looks more hopeful. It looks as though it’s only the restrictions which will apply for a longer period but the discharge from bankruptcy comes after 12 months from the date the person was declared bankrupt.
In which case, it looks as though the inheritance may be safe after all.
:-)