Money in my account before BR

deialca

Hi.

What should I do the money I have in my bank account before going bankruptcy?

I have around £25000 in my account but My unsecured debt is around £185000.
so I'm thinking of going bankruptcy.

Should I take them out and keep/hide somewhere else?

antrobus

deialca wrote: »

....Should I take them out and keep/hide somewhere else?

No. Not unless you fancy an enforced stay in one of HM's holiday camps.

luvchocolate

you declare it on the b.r forms, do not try to hide it, the examiner will need to see all your bank statements mine were for 2 years but they can go back as far as they want to.

always be honest..the alternative does not bear thinking about.

deialca

Ok. SO Can't I keep any of those money?

alastairq

If you [or someone else?] petitions for your BAnkruptcy, that sum will be included in the Bankruptcy estate by the Official Receiver.

It is a [cash] asset.

If you remove it, then a BR petition is sought, the Official Receiver..[because they trawl through the BAnkrupt's accounts, looking for just such monies, going back as far as they deem necessary]...will want to know where it has gone?

And, if needs be, recover it from its hiding place [regardless of where that is...]...for the Bankruptcy estate. The OR has a Duty in law to do so.

However, if the intending Bankrupt has need of saved funds, to purchase/replace essential domestic items, then...as long as proof can be supplied as to where the money has gone, the OR can accept that.

What such funds should not be used for, is to attempt to repay only certain creditors.

This is deemed as 'favouring' one creditor over another, which is a no-no in Bankruptcy.

However, if one is so inclined, and one wishes to attempt to make a dent in one's overall debt level, then one can pay to every creditor, on hte basis of equitable settlements..ie, payment to every creditor [known]...a percentage of the sum, according to the creditor's percentage of the overall debt.

Given the levels of penalty payments claimed, a sum such as £25000 would make but the tiniest dent in one's overall debt....and as such, might be deemed a waste.

If one is contemplating BAnkruptcy as a debt solution, then one is advised to make prior preparation to survive BR.....

Gaz83

deialca wrote: »

Ok. SO Can't I keep any of those money?

How would you feel if you were a creditor to someone who defaulted, only to find out they'd had £25k in their bank account?

alastairq

How would you feel if you were a creditor to someone who defaulted, only to find out they'd had £25k in their bank account?

Aside from the problem that creditors' 'feelings' are irrelevant....?

Put another way, how would a creditor feel if...having just received 25k towards the debt owed, then had to return it all to the Official Receiver some time later, so that it can be distributed equitably between all the other creditors as well.........and that, after the Insolvency Service charges are deducted?

This forum is not concerned with the 'feelings' of creditors.


This forum is concerned with offering practical advice to those facing, or within, Bankruptcy.

deialca

well, I saw the post in here saying below.

Remember to remove ALL cash from your accounts BEFORE being declared bankrupt, as after the Bankruptcy hearing, the money will technically belong to the Official Receiver, and he may refuse you access to it!

I can't post the link because I'm a new user. but if you see this url.

forums.moneysavingexpert.com/showthread.php?t=1639655


so this is wrong information, is it?

nervousmother

That post isn't aimed at someone who has 25k in the bank though, the majority of people who go BR don't have that cash in the bank.
Basically the Date you go BR you no longer can use your bank account, leaving you with no money to buy food or live off, it would be ok to take £100 or so to see you through until you next receive any money.
You haven't given any details of the reasons for BR, is there any way it could be avoided?

alastairq

Also, that advice was given 6 or 7 years ago....and some things have changed in BR, quite remarkably....amongst other things, cars, IPA rules, surplus rules, you name it.

At that time, bank accounts would routinely be frozen [temporarily] whilst the OR had a look-see into them. More recently, the IS realised folk need active accounts to simply live off.

So we gradually came to the situation we have today, where it's the banks themselves who throw wobblies...aside from Co-op, and Barclays......and teh OR expresses 'no interest'...


The difference is, significant amounts of cash, which are an asset...and a more reduced amount, necessary for a reasonable living standard.

There is a difference between justifying keeping 10's of thousands...and maybe a thou or so, for an essential car, or maybe moving house, buying a fridge, etc?

Which can be argued, are essential living expenses.

enginesuck

A non moral approach, hypothetically, would be to withdraw it in cash, and tell the court / receiver that it was a last ditch attempt to save yourself from bankruptcy by using the 25k to gamble. And you lost it all. And you were drunk / high and so can't remember the details. Like I said a non moral person might do that