Receiver claiming money under section 340?

molly73

Hi All
I wonder if anyone out there could help please, the official receiver is claiming that under section 340 I should pay back money. It is my husband that is bankrupt. He was self employed and during struggling times I paid some business bills by credit card. Subsequently he transferred a car into my name by way of payment.
Other creditors were being payed at the time and I have argued that this was the case and it was not a preferential payment and if he still viewed as such he should take the car not any money. The official receiver is sticking to his guns that this transaction falls under section 340, and in view of the present condition and devaluation since the time of transfer (needs quite a bit of work) the OR is not prepared to accept the car in settlement and wants my proposal for payment of £1095 which I cannot afford in 14 days. I could repair the car and sell it but cant affford the repairs to get that value. Yikes pretty heavy stuff - this is the OR at Brighton and he has not been very helpful the bankruptcy wen through on Friday 13th June and the car was transferred in March. Any ideas - I hope there may be someone here who could offer advice. Thank you

im1dful

molly73 wrote: »

Hi All
I wonder if anyone out there could help please, the official receiver is claiming that under section 340 I should pay back money. It is my husband that is bankrupt. He was self employed and during struggling times I paid some business bills by credit card. Subsequently he transferred a car into my name by way of payment.
Other creditors were being payed at the time and I have argued that this was the case and it was not a preferential payment and if he still viewed as such he should take the car not any money. The official receiver is sticking to his guns that this transaction falls under section 340, and in view of the present condition and devaluation since the time of transfer (needs quite a bit of work) the OR is not prepared to accept the car in settlement and wants my proposal for payment of £1095 which I cannot afford in 14 days. I could repair the car and sell it but cant affford the repairs to get that value. Yikes pretty heavy stuff - this is the OR at Brighton and he has not been very helpful the bankruptcy wen through on Friday 13th June and the car was transferred in March. Any ideas - I hope there may be someone here who could offer advice. Thank you

Section 340(2) says "The court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if that individual had not given that preference."

Therefore, if the OR was to apply to court, the correct way to restore the position would be for the car to be given back. If they don't want to take the car, ask for an order as they are unlikely to get one asking for money if the preference was paid by way of a car. Or ask for an order anyway as the OR is very unlikely to go to court although an IP trustee may do it if there are other assets.

molly73

Hi Im1dful

Thank you for that. If they apply to the courts does that means I will get a CCJ against me if they win?

im1dful

molly73 wrote: »

Hi Im1dful

Thank you for that. If they apply to the courts does that means I will get a CCJ against me if they win?

No, it is just an order not a CCJ

molly73

okay, Thanks
The OR seems to been dragging things out my husband went BR June last year and still its not finalisted, the OR has said he wouldnt even consider release until my husband was in paid employment rather than self emp.(which he now is) no effort seems to have been made regarding assetts that are still in situ at the business premises and are being used by the current tennant ie 2 lifts at a garage and they are worth a few grand. Any ideas in your experience when a self employed business is envolved with BR how long it takes to finalise ?
(PS are you in the legal profession)

debt_doctor

Hi,
Unless your OH is not cooperating with the OR then OH will be discharged after 1 year, also OR has no right to instuct anyone in to / out of employment or self employment.

Tell the OR that you have no funds and see what he does. If he goes to court then the estate would have to bear the costs and it may not be worth it.

Best

DD

missimaxo

In my opinion there are two issues here:

1 - the transfer of the car. Strictly speaking the OR can ask for the money in respect of the vehicle's value at the time of transfer - do you know how the value they are asking from you has been established?

If you cannot afford to pay it back, I doubt the OR would apply to court for a transaction of that value. They can legally, but I think the costs would outweigh the benefit, however this is my opionion. They may also write a "fighting fund" letter to creditors to see if they would fund the cost of an IP to try and recover the money.

The other issue would also be whether they would consider the Preference as misconduct for a BRO. If they are investigating this it may be why he has not been considered for early discharge.

2 - The OR cannot force your husband to go into paid employment and I am surprised that they have said this. He will get his discharge at 12 months as long as he is co-operating. With regards to the assets at the premises - how do you know they have not been sold to the people in there? This would usually be the first thing they would try, as there would be no removal costs and a better return for creditors. With regards to how long it takes to finalise, it depends if they are investigating him for a BRO. It can take all 12 months in some cases.

Richard_S

Hi Molly,

I've no personal experience of your dilemma, but it really does seem as though the O.R is taking a heavy handed approach in the hope that he can squeeze something out of you.

I would tell the O.R that you have nothing to propose other than the opportunity to explain the situation to a Judge in Court. Don't ever forget that these people are bureaucrats who never have to live in the real world. They hide behind the power of their organisation, and their job descriptions, and the only satisfaction they can achieve is by intimidating vulnerable people, in the hope that they'll get a pat on the back.

On the other hand, the Judiciary is a force to be reckoned with in it's own right, and they have the power to overturn any injustice that the O.R may wish to perpetrate. Keep your nerve and see whether they want to risk a Judge making the final decision; I somehow, think not.

Regards

Richard

molly73

Hi Missimaxo

The value of the vehicle - they seem to be going with what we suggested. We have had a quote from a car supermarket online with the vehicle in poor condition was £900 the condition of the car at the time was not so bad.
The total of BR is about £34K with the largest ones being the bank and HMRC dont think either of these would fund IP followed by ex lanlord to tune of about £2K and biggest supplier for £1700 dont think it would be worth their while either.
Any ideas how the trustees are appointed if any and how much of a say they have.

The ex landlord has taken possession of a vehicle that was bought in my name but really dont wont to stir things up.

missimaxo

molly73 wrote: »

Hi Missimaxo

The value of the vehicle - they seem to be going with what we suggested. We have had a quote from a car supermarket online with the vehicle in poor condition was £900 the condition of the car at the time was not so bad.
The total of BR is about £34K with the largest ones being the bank and HMRC dont think either of these would fund IP followed by ex lanlord to tune of about £2K and biggest supplier for £1700 dont think it would be worth their while either.
Any ideas how the trustees are appointed if any and how much of a say they have.

The ex landlord has taken possession of a vehicle that was bought in my name but really dont wont to stir things up.

Is the HMRC debt VAT or PAYE/NIC - VAT at the moment are funding IP's in some cases where there think they may be assets, but most cases are when they are the petitioner. I think you would have been notified if VAT had already requested an IP, as they would have been appointed.

The OR is appointed trustee if at around 8 weeks, they make a decision not to call a meeting of creditors. A meeting of creditors can be called at a later date to appoint a trustee other than the Official Receiver or the Official Receiver can action what is called a Secretary of State (SoS) appointment, if the majority of known creditors have already voted for a particular IP to be trustee. There are other reasons for getting an SoS appointment, but that is the most common.

I must admit I have no experience of what an IP will do is they are appointed, I only have experience of doing the appointments, so I cannot say how much they would pursue you.

My advice remains that if you cannot afford to pay back the OR, put it in writing. You may want to try and give some more information to back it up, they probably already have details of your income and family expenditure, if your OH supplied it in his SoA, at interview or on an Income Payments Questionaire at a later date. You may want to duplicate that information. It may also be worth putting in bank stats proving balances if they are low.

missimaxo

Richard_S wrote: »

Hi Molly,

Don't ever forget that these people are bureaucrats who never have to live in the real world. They hide behind the power of their organisation, and their job descriptions, and the only satisfaction they can achieve is by intimidating vulnerable people, in the hope that they'll get a pat on the back.

I find this quite offensive Richard, at the end of the day my job is just a job, and yes I and my colleagues do live in the real world! I do not "intimidate vulnerable people", and if I did I would get severely reprimanded pretty quickly. I have debts like many other people, but will never be able to continue doing the job I do if I went bankrupt, but that does not mean that I berate or judge people that do go bankrupt. For many people, going through the process of dealing with the OR may be awkward, as we do have a job to do, but many people feel it as a huge release as they no longer have to deal with the pressure of creditors and their harrasment.

Yes there are guidleines, but we have to be fair to many people, both bankrupts and creditors. I'm sure if someone owed you money, and went bankrupt and no longer had to pay you, you would hope that someone would to try and get some money back, by using the legislation set down.