Friend's request - is this ok?

Caz312

A dear friend of mine was made bankrupt last year

Has £11k to pay within the next 2 years for the house but there is no way she can come up with a lump sum so is intending to start paying installments.

Has said the money cannot be seen to be coming from her. Her hubby is probably about to go down the bankruptcy route too so he cannot be seen to make the payments (his name not on house)

She has asked if, if she gave me cash, would I send them a cheque each month.

I would love to help her but am a bit concerned this could be looked at as dodgy. Don't know much about bankruptcy and wanted some advice before I comit to help. I am a bit worried that I have been asked as I have a good credit rating and cash in the bank!

ClaireLR

Why can the money not be seen to be coming from her??

Emmzi

It is indeed dodgy as if she has a *lot* of extra cash each month, the receiver may want some of it to pay back her creditors. She may be under-declaring her income to the OR in some way, and commiting fraud.

If it were all above board... she wouldn't need to ask you.

wherediditallgo

By rights, she should be clarifying her position & the status of the house with the OR before doing anything with it. Bankrupts find it extremely difficult to get a bank account with a cheque book, but they can have basic bank accounts, & if everything was above board she would set up payments by an alternative method, like bankers draft or direct debit, things you can organise when you're BR. I could be wrong, but if she's concerned about the money being seen to come from her, that makes me think she's hiding some income/money/property from the OR or the Inland Revenue that she should be declaring. In which case, if I were you I would stay out of it. You know she's BR & you also know her husband may go down the same route. If you get involved (especially for that length of time), you could find yourself having to answer some awkward questions further down the line.

Caz312

Thanks - she says the money cannot be seen to come from her as they will want to know where it came from.
The money will be coming from her hubbies wages but due to the fact he is going to go bankrupt too it cannot come from him (he gets paid cash)
Think she is talking about £50 per week...she is living in the hope that if she makes these payments they will right the rest off

thewayitis_2

Sounds like a right pair of friends you've got there, Caz!

They have money floating around that they dont want anyone to see, while hubby continues to build up debt as he crashes towards BR? A cynical person might think they were playing the system.

You could help them out and probably see no consequences at all, but people like this do eventually get whats coming to them. Be sure you arent also in the firing line.

wherediditallgo

Sorry, but I don't quite believe her. First of all, she doesn't need to involve you at all. She's already BR & the house is in her name, not her hubby's. I can't think of a reason why he can't give her the cash to pay through her account, as long as she declares to the OR involved in her case what she's doing, & he does the same when he goes BR. If the house is in her name, the OR should already know of its existence. If it's him not wanting to declare the money, that's hiding a portion of his income & isn't on - the OR will expect to see his full income on the SOA, not just the bit he thinks he can get away with declaring. Secondly, £50pw doesn't add up to £11k over 2 years (doesn't even come to half that), so either it's more than that per week that they're looking to hide with your help or they're also getting money paid another way to enable them/her to meet the target date.

There's a level of deception going on here, & you'd be best to stay right out of it. They already know they're doing wrong by offering to give you cash if you provide the cheque & pay the instalment for them, yet they want to involve a friend in their wrongdoing. That's not the way to treat a friend in my opinion.

Caz312

Thanks - think I will have to decline to help. Feels like money laundering!

"£50pw doesn't add up to £11k over 2 years (doesn't even come to half that), so either it's more than that per week that they're looking to hide with your help or they're also getting money paid another way to enable them/her to meet the target date."
they are hoping that the rest will be written off by making some regular contribution.

They are terrible with money - her hubby was just made redundant after 10 years service and made no dent to his debts - they just went off on holiday to the states and blew the lot.

wherediditallgo

That's a good decision, Caz. Hoping the rest will get written off isn't the same as having a legal agreement for that to happen. And if the balance outstanding doesn't get written off, there would be additional pressure on you to continue the deceptive agreement until it has been paid - are you prepared for that? If her hubby gets paid cash, he would have to sort out his own tax & NI, so it seems to me the IR isn't aware of how much money he's actually got, whether the money is wages or the balance of his redundancy pay. And redundancy pay is unlikely to have been paid in cash, so there'll already be a paper trail for that, which he'll have to account for to the OR - the OR can ask his employer for information if necessary. If he's been recently made redundant, the OR will take a dim view of all the money being blown on a holiday & then him declaring BR on his return. You're best off staying out of it.