Enquiry from OR

roundel

Hi everyone. 

I declared bankruptcy in May 2018 and discharged May 2019. During the period of bankruptcy my Mum passed away leaving her house to my brother and I to be sold and proceeds shared. I informed the OR and was advised that my beneficial interest now belonged to the OR as after acquired. I was also told that when the property was sold I would be liable to a realisation of assets fee at 15% of my share which would cost me approximately £25000. After investigating I spoke to a solicitor and was told that if a 3rd party using their own funds were to settle all my debts plus OR fees and admin charges of £7990 I would avoid the 15% additional charge. I was very fortunate to find someone prepared to help and in July 2019 these payments were made to all creditors and OR. I forwarded evidence to the OR that these payments had been made and also informed him that I would not be seeking an annulment as I had no intention of taking out credit ever again and I was happy to allow my credit file to be adjusted after six years. So the creditors and OR were paid middle of July 2019 by the 3rd party using their own funds and my mum’s house sold early August 2019. Fast forward to yesterday and I received an email from OR ofice signed by someone calling themselves an Examiner. He explained that my file had been passed to him for review and he pointed out the procedure for annulment despite my already stating in 2019 that I would not be seeking an annulment. He has said that if I chose not to seek an annulment then I would have to give him the following details:- what is the current situation of my mum’s estate, how much did I receive and when did I receive the funds. 

I apologise for the long message but wanted to include all details and I am asking for any  comments as to why this information is required when all the debts have been settled. I thought it was over but nearly 2 years later I still can’t close this chapter in my life. 

Thanks for any input. 

Minkym00

As you didn't seek an annulment then (which, to be honest, people normally do), and were bankrupt when your Mum passed away, then the proceeds were a bankruptcy asset and should have been paid to the OR. I appreciate that the debts and fees were paid, but the OR was your trustee and still had a claim on the funds as you hadn't had the order annulled. 

I understand why you don't wish to seek an annulment, but it would be prudent to do so. 

roundel

Thanks minkymoo. If the proceeds had gone to the OR what would he do with them as there were no debts or charges left to pay?

Minkym00

The 15% trustee fee would have been deducted. Then the OR would have put a notice in the Gazette for 28 days to see if any other creditors come forward with a proof of debt. If they did then funds would have been distributed to them. Then the balance of funds would have been paid back to you. 

roundel

The point of using a 3rd party to pay off the debts was because of advice given to me by my solicitor resulting in my not having to pay the 15%. I originally thought in my naivety that once I had received the proceeds of the house sale I would then arrange the payment to creditors. The OR himself informed me that he would receive the proceeds and make the payments as I was not allowed to but if a 3rd party using their own funds wanted to pay the debts there would not be any restriction in them doing so. Hence the payments were made by the 3rd party prior to the house being sold and I avoided the 15% fee. Nothing was ever mentioned to me at anytime by the OR office with regards to your comment about the Gazette. 

roundel

In light of what’s been said if I respond giving the details required do you feel that things will be concluded. 

Minkym00

What the solicitor told you was the correct thing to do in order to stop the 15% fee for the proceeds, but they should have then advise you to get your bankruptcy annulled to ensure this issue didn’t arise.

Having said that, as you are discharged the OR can’t compel the information from you now and would be unlikely to take any action seeing as your debts and fees are paid. I would ask the OR why they want to know and want they will do if you tell them. You have every right to know. As this is an old case now it’s more than likely they want the info for admin and they want to close the file. 

roundel

Thanks for your replies. I’ve decided to speak to an IP about annulment and although it wasn’t something I was too bothered about I feel I should now reconsider and at least it will finally end this chapter in my life. Thanks again. 

Minkym00

Beware of spending too much money on getting assistance on an annulment. All you need do is go to the court, fill out form IAA, attach a brief witness statement stating that you have paid your debts and fees and that you are seeking an annulment under s.282 (b) of the Insolvency Act 1986. Then pay the fee (about £100) and send the paperwork and the hearing date to the OR.

All you need do is attend the hearing and that's it. Getting a solicitor involved means they will charge you, plus they usually employ counsel to attend on their behalf so you pay their fees too. 

roundel

Thanks for that as i have been told this morning by an IP that solicitor will charge between 3-5k!! Is it really that straightforward and where can I get the IAA form?

Minkym00

Well that kinda proves my point! The form and guidance on completing it are here Form IAA: Apply to the court about an insolvency issue ('application notice') - GOV.UK (www.gov.uk). A court clerk may help you, or you can PM me with questions if you need to.

You'll need to get receipts/email confirmation from the creditors showing that each debt has been settled and add them to the witness statement.