Bankruptcy & Statute Barred

dave3dtg

Hi. First post so bare with me.

I recently (06/03/20) declared myself bankrupt with £65K debts. A lot of that figure is made up of debts that are over 6 and years old. The Insolvency Service told me to put every debt going back as far as needed on my bankruptcy. However, I've since been informed that I shouldn't have done..."why declare debt when you're not legally obliged to pay it? Now if you come into some money you're going to have to pay them off Fool"

Is this the case please?
Cheers.
Dave

sammy32683

It is 6 years if they make no effort to pursue the money. If you were paying these or they were sending letters/starting enforcement then there is no limitation and you would have had to pay them. Doesn't matter if after 5 years 11 months they send one letter that would remove any limitations on them trying to collect money. 

Regardless if you've gone bankruptcy list everything you can think of as the OR will go through your credit reports to see all the debts you have and query why you left ones off. If they believe you have actively tried to deceive them then things will get a whole lot worse for you.

mwarby

If your bankrupt and you come in to money the OR takes it pretty much regardless of the debts you declare. The bankruptcy fees are huge (the fee you pay at the start is only one of many fees bankruptcy can bring). Unless you come into hundreds of thousands I would hold your breath as to there being anything left over for you

sourcrates

sammy32683 said:

It is 6 years if they make no effort to pursue the money. If you were paying these or they were sending letters/starting enforcement then there is no limitation and you would have had to pay them. Doesn't matter if after 5 years 11 months they send one letter that would remove any limitations on them trying to collect money. 

Regardless if you've gone bankruptcy list everything you can think of as the OR will go through your credit reports to see all the debts you have and query why you left ones off. If they believe you have actively tried to deceive them then things will get a whole lot worse for you.

Sammy32683 - The creditor can send as many letters as they like, it makes no difference to the limitations period.
Only payment or written acknowledgment by the debtor re-sets the statute barred clock.

OP - Statute barred debts are not legally enforceable, however Bankruptcy is an all encompassing arrangement, so covers all your debts regardless of age, or enforceability, so why they told you to list them is strange.

Are you likely to come into money in the next 12 months ? You only have to pay something if the OR informs you they want an income payment arrangement from you, and you only get one if you have more than £20 per month disposable income.
Perhaps if this was likely to be a problem, you should have taken advise prior to going bankrupt, to be honest I think you may be worrying about something that’s not going to happen.

Minkym00

You are only “legally obliged” to pay off your debts if you have assets right now, or if you come into money within your 12 month bankruptcy period. If neither of these situations apply to you then your friend’s comment is rubbish. If it does then please post details for further advice. 

sammy32683

sourcrates said:

sammy32683 said:

It is 6 years if they make no effort to pursue the money. If you were paying these or they were sending letters/starting enforcement then there is no limitation and you would have had to pay them. Doesn't matter if after 5 years 11 months they send one letter that would remove any limitations on them trying to collect money. 

Regardless if you've gone bankruptcy list everything you can think of as the OR will go through your credit reports to see all the debts you have and query why you left ones off. If they believe you have actively tried to deceive them then things will get a whole lot worse for you.

Sammy32683 - The creditor can send as many letters as they like, it makes no difference to the limitations period.
Only payment or written acknowledgment by the debtor re-sets the statute barred clock.

OP - Statute barred debts are not legally enforceable, however Bankruptcy is an all encompassing arrangement, so covers all your debts regardless of age, or enforceability, so why they told you to list them is strange.

Are you likely to come into money in the next 12 months ? You only have to pay something if the OR informs you they want an income payment arrangement from you, and you only get one if you have more than £20 per month disposable income.
Perhaps if this was likely to be a problem, you should have taken advise prior to going bankrupt, to be honest I think you may be worrying about something that’s not going to happen.

Sourcrates - sorry I should have been more clear. If they send a letter saying they have started court proceeding then it removes any limitations. So if they start court proceedings at 5 years 11 months after the default then it removes the limitations.

fatbelly

Under English law a debt does not cease to exist because it is bound by Limitation 

Scotland is different but then so are their insolvency options.

On a bankruptcy application you are required to itemise your  debts so listing all of them is correct. However, all debts incurred prior to the date of the bankruptcy are covered.

jayzor

Just on a side note to this, can someone confirm it is correct that one discharged from bankruptcy, if you were to come into any money say from the lottery or a competition win, the OR wouldn’t be able to touch any of this money?

fatbelly

That would be correct. If the win was before the discharge (I guess the date it became quantified would be relevant) it would be different.

Generally speaking, the trustee would consider claiming as after-acquired, any property which would have been an asset, if it had been in the possession of the bankrupt, at the date of the bankruptcy order. Conversely, any asset which would have been treated as exempt and in the possession of the bankrupt, at the date of the bankruptcy order, would not normally be considered as after-acquired property. This means that the usual exemptions for tools of trade, household equipment and some motor vehicles will still apply. The trustee may claim such property even if the trustee only becomes aware of the property after the bankrupt’s discharge, providing it was acquired by, or devolved upon, the bankrupt between the date of the bankruptcy order and the date of discharge.

mwarby

jayzor said:

Just on a side note to this, can someone confirm it is correct that one discharged from bankruptcy, if you were to come into any money say from the lottery or a competition win, the OR wouldn’t be able to touch any of this money?

yes once your discharged any windfalls are yours.

The only possible exceptions might be if you had an inheritance which was due to you before discharge, but not paid until afterwards (I think this would be claimable  by the OR), or if you won the lottery as an undischarged bankrupt but didn't cash in ticket until after discharge

dave3dtg

Thanks all for your input.
Was aware of keeping windfalls after discharge. Also of assets/windfalls before discharge but only available after discharge being at risk. This applies at time of death of who's bequeathed assets/money rather than on completion of probate.
Approximately £38-43K of my debts are over the 6 years and I've only ever been threatened with legal proceedings, though most are with Vultures and Dogs sorry debt collectors. £14K of that is a secured loan with London Scottish who are in administration and was written off in 2005 but they're chasing it. £7K was a double money back investment from an acquaintance who didn't want a contract. X2 Money back was on condition of a business taking off. 
It's ironic that if I hadn't gone bankrupt and got a windfall I wouldn't have paid the debt but now I have gone bankrupt then I'll have to pay them if I do get a windfall within 10 months. I bet the OR would never admit to me not being liable due to Statute Barred.