DRO preferential payment?

ADT18

Hi, I am decided to enter DRO as for the moment is the best option for. The problem is that I have a guarantor loan, and the guarantor is my mom. When she heard I want to enter DRO she told me that she doesn't want to be responsable for the loan and pay for it through her account. So to avoid this she wants to give me the full loan amount and to pay it off before entering DRO. I've read that this might be considered preferential payment. Can I prove somehow that my mom gave me the money to pay it off, as anyway she was going to pay for it as is my guarantor?

thevdm

If the payment for the loan comes from your mum then it shouldn't be classed as a preferential payment as in their eyes you haven't paid it, the payment would have to come from her account to make it easy to prove though. If she gave you the money and you made the payment from your account then it would be harder to prove that your guarantor (who is equally liable for the debt in the eyes of the law) paid the debt instead of yourself.

In my case I had some joint debts with my wife, she still made some payments towards them, but as the payment came from her it didn't count as a preferential payment from myself.

fatbelly

It's quite straightforward for your mum just to pay this off from her account. Why doesn't she want to do this?

ADT18

She has a perfect credit score absolutely no debt and saving for good years to take a mortgage. When I took out the loan I to convinced her to be my guarantot (I took the loan because I was about to give birth and needed baby essentials) but she simply doesn't want for the loan to be her responsability ,that's why she offered me the money to pay it. It's great that she does this and in the financial situation that I am she always tried to help me as much as she could, but what do I do now...I really need the DRO to work as is my last chance for a normal life.

JayRitchie

Why cant she send the full amount to clear the loan directly to the loan company the problem solved?

thevdm

If she gives you the money and you use it to pay the creditor then it would likely be classed as a preferential payment, if she pays the same money directly to the creditor then it is not a preferential payment from yourself.

Either way round, it is the same money, just one way it doesn't affect your DRO.

If she pays the money directly to the creditor it won't affect her credit score, but if you start a DRO and she doesn't pay it to the creditor it will negatively affect her credit score.

ADT18

I also worked as self employed before, now I don't work anymore. Do I need to close my self-employment? The mainly reason I left it open is for tax free childcare...And also in what proportion my partners income affects me?