its so damn complicated!!!!

AK-27

Hi everyone, after reading everyones contributions to this site for so long, im now going to take the plunge and ask for advice for myself!

Ive got debts of £45k and hubby £40k. I thought i was managing fine as i have a good job and could cope with the repayments and contribute to the household. Also, about 1/3 of debt is student loans etc. a year ago i decided fulfill my dreams and set up my own business. I used some savings i had and borrowed a lot from my mum(her life savings basically). This was back in May this year. However, now things have changed drastically! My hubby's given up his job, decided to go bankrupt and enrolled on a course at the local college all at the same time!:mad:

This had been in the pipeline for years, but i never thought he would go for it all at the same time! now this has left me in a really bad way. i have to now support him, run our household and continue to make payments to my own creditors. I took some advice from both the CAB and CCCS, who say i should declare myself bankrupt too. I dont want to, but with the way things are going i may well have to in the near future as i am now overspending by £300 every month!:eek:

i want to now return at least some of my mums money back to her as there is no point in continuing with the business but i am afraid that the OR may later query the amount. I have nearly £10,000 of my mums money left from the money she lent me originally (£18500)

I dont want my mum to lose out esp as she took a huge gamble lending me the money.

Will i get into trouble if i just returned the money now and maybe went bankrupt in the next 6 months-years time?

Thanks so much in advance for your replies.

Balls_Of_Steel

AK-27 wrote: »

Will i get into trouble if i just returned the money now and maybe went bankrupt in the next 6 months-years time?

Does the money you have borrowed show in the accounts of your business? If yes, then your mother is a creditor and can be repaid before any bankruptcy proceedings in the future.

mr.broderick

Could i be nosey and ask how you ran up a debt of 85k?
drugs? Gambling problem? Or just squandered?

Toto

Your question would be much better asked on the bankruptcy board which is a sub board of dfw

http://forums.moneysavingexpert.com/forumdisplay.html?f=136

You'll get advice there from people who know all about bankruptcy.

PROFESSIONAL_LANDLORD

Balls_Of_Steel wrote: »

Does the money you have borrowed show in the accounts of your business? If yes, then your mother is a creditor and can be repaid before any bankruptcy proceedings in the future.

Your mother will only become a creditor AFTER your bankrupt, she could be left with very little after any monies are divided up. Best to pay her as much as possible ASAP, don't see a problem with that, sorry to hear that your business failed .

PROFESSIONAL_LANDLORD

mr.broderick wrote: »

Could i be nosey and ask how you ran up a debt of 85k?
drugs? Gambling problem? Or just squandered?

Also, about 1/3 of debt is student loans etc.

Failed business also to consider .Given AK-27 dilemma , your responce is one of a ******

Toto

Actually professional landlord's advice isn't correct. The OR will look very severely on favouring any creditor, be it family or otherwise and could result in a BRO (Bankruptcy restriction order). He/She could and would also ask for any payments made to a creditor which is over and above a pro rata share to be returned so he can divide it between all creditors.

Please do ask advice on the bankruptcy board.

Chriswil

Why didn't your husband discuss going bankrupt with you before he did. My marriage means so much to me, and means that `i would discuss everything with T before I make a decision. Surely he did the same?

PROFESSIONAL_LANDLORD

Toto wrote: »

Actually professional landlord's advice isn't correct. The OR will look very severely on favouring any creditor, be it family or otherwise and could result in a BRO (Bankruptcy restriction order). He/She could and would also ask for any payments made to a creditor which is over and above a pro rata share to be returned so he can divide it between all creditors.

Please do ask advice on the bankruptcy board.

Actually Toto advice isn't correct. The daughter is in debt to the mother, but the mother only becomes a CREDITOR after the daughter becomes bankrupt .

AK-27 stated

bankrupt in the next 6 months-years time?

which is a significant following of time for anyones finances to change up or down, if an individual were to move their assets shortly before becoming bankrupt then that would be a different matter.


I agree she should run her post on the Bankruptcy board .

fermi

An extract from some of the Official Receiver's guidelines state that:

It is up to the trustee, liquidator or administrator to show the court that the preference had taken place in anticipation of insolvency and was influenced by a desire to put the creditor in a better position. Where the preference was given to an associate, except for an employee, the associate must prove that there was no desire to put him in a better position. For a preference to be capable of consideration by the court, it must have taken place in the 6 months prior to the date of the presentation of the petition in both bankruptcy and compulsory winding-up proceedings. Where the preference involved an associate of an individual (see paragraph viii) or someone connected to the company (see paragraph ix), the relevant period is extended to 2 years prior to the presentation of the petition.
At the time the preference was made, the individual or company must have been insolvent or become insolvent as a result of the preference, although in the case of an associate or connected person, there is a presumption of insolvency.
The court may order that the position be restored to what it would have been if the preference had never been given, although a third party who purchased something in good faith and for value will be protected unless the third party had notice of the impending insolvency or if he was an associate or connected person.

And an associate as referenced above can include a relative:

NB: Where the transaction involved an associate of the bankrupt, there is a presumption that the bankrupt was insolvent at the time the transaction took place so that the trustee does not need to prove that the individual was insolvent. An associate can be the individual’s spouse, or a relative or relative’s spouse of either the individual or the individual’s spouse.

If the Official Receiver believes that a preference was given on the terms referred to above they can and will come after the money, via the courts if necessary. And yes, it could be grounds for a BRU/BRO.

As always, please seek some expert and impartial advice on both your financial position and any consequences that bankruptcy would hold for you. EDIT: Oops. Missed that you have spoken to CCCS/CAB.

rog2

Hi AK-27 - I've 'snuck' accross from the 'Bankruptcy and Living with it' forum, after seeing Toto's post.
I would, also suggest that you post your situation over there, as there are many people who are in, or have been in, a similar situation to that in which you find yourself.
There are a couple of quick points:
1. Student Loans are NOT, normally included in bankruptcy.
2. Fact - Your mum, as is ANYONE to whom you owe money, a CREDITOR. Bankruptcy does not alter that fact - anyone who lends money to someone becomes a creditor immediately the money changes hands.
3. An OR will look at your accounts, and COULD go back as much as five years, although in my case, only went back two years. The OR will, almost certainly, question any single large payment to a creditor, and could view the transaction as giving preferential status, to your mum, over other creditors. This would, of course, depend on how close to bankruptcy this payment was made, and whether you 'knew' at the time that you were going to petition for bankruptcy.
I see that you have already spoken to CAB, and CCCS, and that they have advised bankruptcy, so why not have a look through the Bankruptcy Forum, where we can certainly help with the mechanics of the process.

Good Luck

rog2