Bankruptcy and selling car 1 October 2021 at 12:52PM in Bankruptcy & living with it 2 replies 273 views

doggydogdog

Hi 
I’m after advice. 

If Fred sold his car two months before filing for BR and used it to part pay back frank who originally leant him the money in the first place (total £450) does frank need to pay the £450 back to the OR and then make a claim on it very and get some back? 

Sonic101

Hi there

Assuming that the £450 that the car was sold for was a sensible amount (so there wouldn't be the side issue of the sale being seen as a transaction at undervalue), I think the issue here would be that Fred paid some of the £450 to Frank but presumably nothing to his other creditors - so this would been seen as preferential treatment of one creditor.  I don't know whether Frank would be chased for the money, but this wouldn't been seen in a very good light. 

fatbelly

I would expect Frank to be asked to repay but in that example I don't think they'd push too hard for £450.

As for making a claim to the OR very few payments are made to creditors after personal bankruptcy. Small amounts just get swallowed up in the OR fees. The initial £680 is the adjudicator fee and a deposit against the fees, which can stretch to several thousand pounds depending on the work done.