Dealing with Official Receiver (Creditor)

AndyM347

Hi

This is not the normal question on this group but seemed the most appropriate place.

I have earlier this year made a debtor bankrupt.  After waiting 14 weeks and hearing nothing I phoned the OR.  I was told that the insolvent was not cooperating and therefore they were going for a suspension of discharge.  However, there are a number of things I'm concerned with.  I'm getting a general sense that the OR doesn't want to do much work!  My concerns below, any advice appreciated:

* I was told there will be no report.  He also told me that he couldn't inform me of the reason the insolvent got into a mess as "it didn't stack up".  My understanding is that the OR is obliged to provide me with a report, no timeframe but should aim for 8 weeks.  Regarding the reasons, I believe I have the right to an explanation and if the OR doesn't believe him then he can just state that.

* I was told there will be no public examination.  He stated that could hinder the SoD as he may appear in court, simply repeat the same lies and then the court would then be asking what is the problem?  I know I can demand a PE but would it really be disadvantageous - need a 2nd opinion

* The insolvent was running what appeared to be a successful business and then one day just stopped.  I'm aware of about £80k of deposits he took prior to that day.  My concern is that he got bored with his business thought he had a nest egg for a few years and then transferred the money to family/friend and will then draw an income from that.  I understand the OR can request bank statements if the insolvent doesn't cooperate and I've no idea if he has done that but as a creditor can I demand a reasonable level of investigation to determine if there are hidden assets?

* The insolvent has found a job and I know where he is working.  I know the OR can't contact the employer but is there anything I can request here to make legal requirement for the insolvent to hand over part of his wages?

* Looking to the future and probably very long term.  If somehow the insolvent manages to purchase a property or comes into money (inheritance/lottery(, can I get a charge placed on that property or get the OR to recover that money?

Sorry for long post, hope I get some advice back.

Andy

fatbelly

AndyM347 said:

Hi



* The insolvent was running what appeared to be a successful business and then one day just stopped.  I'm aware of about £80k of deposits he took prior to that day.  My concern is that he got bored with his business thought he had a nest egg for a few years and then transferred the money to family/friend and will then draw an income from that.  I understand the OR can request bank statements if the insolvent doesn't cooperate and I've no idea if he has done that but as a creditor can I demand a reasonable level of investigation to determine if there are hidden assets?

* The insolvent has found a job and I know where he is working.  I know the OR can't contact the employer but is there anything I can request here to make legal requirement for the insolvent to hand over part of his wages?


Sorry for long post, hope I get some advice back.

Andy

Have you made the OR aware of these facts? Of course the OR can contact his employer, and make an Income Payment Order if appropriate

You should be aware that the wheels grind slowly at the Insolvency Service. Also that their prime concern is finding enough in surplus income and liquidated assets to cover their own fees. Very few creditors see a return.

His bankruptcy protects him from action by you

AndyM347

fatbelly said:

Have you made the OR aware of these facts? Of course the OR can contact his employer, and make an Income Payment Order if appropriate

Not yet but I will do.  I just wanted to be sure of my facts when the OR says he can't get bank statements or he can't contact the employer.  He's already stated that he can't send a report and I know that to be untrue.  So from what you are saying both actions are possible.

fatbelly

If you give the OR info such as you gave in your first post, it will be investigated.

Don't forget, the bankrupt is on a public register so there is no problem in the OR writing to an employer to say 'Do you employ Mr X?'

Actually they could probably go straight to HMRC and be able to say 'we note you are employing Mr X and paying him £Y...'

There's often a lot to investigate, and overturning one stone leads to several others. This won't be a quick process particularly if he is being evasive. Are you familiar with the Boris Becker case? Made bankrupt in 2017, jailed in 2022.

Minkym00

Taking your points in turn…

You must receive a report under 10.66 of the Insolvency Rules (see here The Insolvency (England and Wales) Rules 2016 (legislation.gov.uk). There is limited information that the OR can put in the report to creditors, and they certainly can’t say that they don’t believe him. If you are expecting a report detailing their investigations, you won’t get that and are not entitled to anything like that.

This makes no sense. If he is called for a public examination and attends he will be sworn in under oath. If he (provably) lies he could be in contempt and liable to a fine or prison.

The issue here will be in which account the money was deposited. Any account in his name will be on his credit reference report and statements can be requested from the bank. That is absolute basic investigation and I’d be very surprised if it wasn’t done. It’s entirely possible that the money was deposited into an account not in his name.

All you can do is advise the that OR, you can’t demand monies. Don’t forget that any surplus income would be subject to an IPA, and the fees of the bankruptcy are paid before any debts. You are most likely not the only creditor either.

If the insolvent comes into any money whilst still undischarged then it will be an after acquired asset in the bankruptcy and the OR can claim it. Hence they are looking at an SoD. A suspension of discharge is a punitive measure, the most punitive the OR can ask for, and gives a level of protection so that assets can be claimed in the future.

AndyM347

Thank you for your advice.  I have now emailed the OR with my information.

AndyM347

Thanks Minkym00

There is limited information that the OR can put in the report to creditors, and they certainly can’t say that they don’t believe him. If you are expecting a report detailing their investigations, you won’t get that and are not entitled to anything like that.

I was not expecting a summary of the investigation.  More the reason for the insolvency and any assets that were identified.  Regarding believing the reason, I see this in the technical manual

Where the official receiver disagrees with the reason for the insolvency given by the bankrupt or director, a statement should be added to the report to that effect, giving the official receiver's opinion on the reason for the insolvency

I honestly don't know if a public examination is going to be worth it.  I'd get some pleasure out of seeing him in court but I understand the OR not wishing to incur the cost if there would be no gain.  I also wouldn't want to incur that cost by requesting it myself.  Besides him getting a fine just reduces the assets he has to hand over!

The issue here will be in which account the money was deposited. 

All of the monies were transferred into his business account and as standard I check the name of the account matches before transferring.  Anyway, I have advised the OR that if there were going to be any assets this is where to look.

All you can do is advise the that OR, you can’t demand monies.

I get that but without any information coming out of the OR I can't gauge whether he's truly looking for ways to recover assets or just goes for SoD as a low-cost option.  So I've advised him where I think the assets are and I just hope he follows up on it.  Wasn't expecting it to be like this.

Minkym00

You are looking at old guidance there, there is no such commentary on the current guidance here: Technical guidance for Official Receivers - 43. Creditors and liabilities - Guidance - GOV.UK (www.gov.uk) 43.174 refers.

 

You’ve informed the OR that there may be (or were) assets in a bank account, so let them get on with that. If he transferred assets out of the reach of creditors then the OR will attempt recovery (and the debtor will likely get a bankruptcy restrictions order). But there’s no guarantee that these fund will be recoverable. If the cash is gone, it’s gone. Be prepared that you won’t see your money again.