Large cash sum during bankruptcy

Trinitrotoluene

Hello all,

My partner went bankrupt in January of this year and received a cheque today for compensation for an ongoing fraud case where she was defrauded leading to her bankruptcy. Amount is around £4k (not even close to what was written off at the bankruptcy.

Obviously she's going to declare this to the OR - and I expect they will simply take the lot.

Can anyone offer any insight on the usual process for this and what is likely to happen after she declares it?

longtermplanner

I suggest she writes them a letter saying what she has received and why, encloses a photocopy of the check and ask what she should do with it.

If it was for a personal injury, then she could keep it, but AFAIK for fraud the OR will expect all of it.

National_Debtline

longtermplanner wrote: »

If it was for a personal injury, then she could keep it, but AFAIK for fraud the OR will expect all of it.

That would be my expectation too.

In bankruptcy a distinction is made between "personal" claims (this covers things like physical injury and reputational damage) and "non-personal" claims. The fraud compensation referred to above will almost certainly be classed as "non-personal" and thus would be claimed by the receiver.

More on this from the Insolvency Service's technical manual:

http://www.insolvencydirect.bis.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter30/Part%205/Part%205.htm#30.103

Dennis @NDL