Preferential Payment Sister Next Account

purplestrawberry

I have been using my sisters Next account with her permission and made a larger payment recently, but have come to realise that I need to go Bankrupt. Can anyone tell me what will happen, will it prevent me from going bankrupt, how will they deal with it. A few monthly payments will show going out of my bank aswell, I stopped paying other creditors because with my son's autism and me not working everything just became too much, money was so tight.

Any advice please?

debt_doctor

Hi,

What was the reason for the larger payment?

DD

purplestrawberry

Just trying to get it paid off quicker.

debt_doctor

Sorry to be persistent, why was you trying to pay it off quicker? (It's important!)
DD

purplestrawberry

I just wanted it gone off my back, I don't know what else to say I just wanted to get it gone quicker. try to free up some money, my daughter leant me the money to pay the larger sum.

debt_doctor

The insolvency service might say that you paid this account in preference to your other debts because you knew that you sister would be left with the debt if you became bankrupt.

Would you agree with them or was there a different reason?

DD

purplestrawberry

No, i know she wouldn't have been left with the debt, because my daughter agreed to make the remaining payments, to help me out as I am struggling.

purplestrawberry

I wasn't planning to go bankrupt then only a few days later after sitting down and talking to my daughter did I realise that my life was out of control, or I would not have paid it.

debt_doctor

Ok.
Was it a big payment in relation to the debt? Was it like £50 against a £500 debt - what sort of figures are we talking about?

EDIT - just seen your last post. Thanks.

purplestrawberry

£400 against £1,600

debt_doctor

Thanks.

This is the definition of a preference in bankruptcy: To make a payment, other than in the ordinary course of business, with a view to putting that creditor in a better position if you became bankrupt.

Your situation is interesting as you describe it to me. It WAS a 'payment other than in the ordinary course of business' (not just the standard payment) BUT if you knew that your daughter would continue to pay if you became bankrupt (which is her choice) then making the payment 'with a view to improving the creditors position' becomes diluted.

It's not a massive payment in the big scheme of things, ultimately the OR could decide it was a preference - they would ask your sister to repay the £400 in that case - she might say she doesnt have it!

The OR could attempt to but a BRU/O against you for the behaviour (or not) This would extend you bankruptcy conditions for a further period of time - you would still be discharged after the year.

When you think of the relief that bankruptcy could bring you (get further advice first) I would have thought the risk of the above is a risk worth taking - but thats for you to decide - why not talk it through with your family?

DD