Paying Creditor before Bankruptcy hearing
in Bankruptcy & living with it
5 replies 482 views
Hi, I wonder if you could help me, I am facing a final bankruptcy hearing in November. I owe a number of creditors substantial amounts of money, however one creditor went to the High Court and had a court order against me for costs from a High Court hearing, as it was getting very tough with this particular creditor, I just decided to pay them as it was one of the lowest amounts, however the creditor is resolute that they remain a "supporting creditor" and still wants to participate and give evidence in the final bankruptcy proceedings as a "supporting creditor".
They say although they have received the money, it doesn't remove them as a supporting creditor, as it is treating them as a "preferential creditor" and they can still appear and make submission to the court at the final proceedings.
Is this true or are they bluffing, can they still be a creditor in the final bankruptcy hearing if they have received payment?
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Everyone should be treated equally, and that normally means not paying anything to anyone.
You may need to explain this to the OR further down the line, so have your excuses ready.
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As sourcrates says, paying one creditor puts them in an unequal position and could be classed as a misconduct. However it would be looked at in terms of "did the bankrupt benefit from it?" If you didn't, the OR would just take action to reverse the payment and that would be that (especially if it's a small proportion of the total debt and the creditor was not a "connected party" i.e. family member etc).
If they are no longer a creditor I cannot see how they can class themselves as one and rock up to the hearing and give evidence. They can't have it both ways - if they want to be creditor then they should give you the money back! If they are not a creditor then they are not a supporting creditor either. If they do turn up at the hearing then you should object to their giving evidence.
However I don’t know what advice you are seeking here? What are you worried about? At the bankruptcy hearing all the judge is going to do is confirm that the stat demand has been correctly served, hear any evidence from you that you are not insolvent or can pay the debt immediately, and then make the order if they adjudge you to be insolvent. The judge isn’t interested in hearing from every creditor, they will already have had a report and witness statements and read through them. If this creditor has an axe to grind about how the debt came about then they can tell the OR.