Anyone have experience of BR & how it effects personal debts?

ecg26

Hi there, I posted last week and a few people replied, thank you very much for that it helped knowing that I am not alone in the BR world!
I wondered if anyone had experience of how BR effects personal debts, I have owed my father a substantial amount of money which he is writing off due to my soon to be BR.. but I heard from someone that when they are investigating your financial affairs if it appears as if a personal debt (ie: my dad) was receiving money not pro rata to my other debts they can approach him for the money they should have got? Has this happened to anyone?

Thanks for your help emily x

Toon_Dave

Hi ECG...Good morning...

i havnt much experience on this as only just starting out on the BR road my self. I think in the eyes of the OR all debts whether they be personel or compannies are treated the same.

I think they cannot get money back from your dad that you have paid...its like saying one bank asking another bank if you had paid them a higher amount...it just isnt done.

I would certainly put the personel debt on the SOA for BR and OR as you have nothing to hide...im sure there is somewhere to write any extra comments on the forms so you can write that your father is writing this debt off after the BR..

I hope some others will be able to give you the official line as above is just be personel opinion and as such i would get professional advise.

Have you spoken to the CCCS or DEBTLINE or CAB regarding the whole situation. They will give you free and impartial advice on this.

Good luck and well done for posting.
Dave.


If your father has been getting paid preferencially then i suppose they could look at this in a non favourable way but family pressures etc can be different so the OR may/should be used to this.

seven2seven

As Toon_Dave mentions , preferential creditors , it is frowned upon if you pay more than "a fair share" to one creditor. All you can do is be honest with the OR . As regards your Dad writing off the debt , if you have no assets then he , along with anyone else you owe money to will not receive a penny anyway. If there are any assets then these will be realised and distributed equally to all creditors. It is possible the OR will try and retrieve some money from your Dad , you will have to wait and see.

Anyway , good luck Emily .

fermi

Toon_Dave wrote: »

I think they cannot get money back from your dad that you have paid...its like saying one bank asking another bank if you had paid them a higher amount...it just isnt done.

I'm afraid that there are provisions in the Insolvency Act 1986 that do allow the OR to recover money paid as a "preference". This can be done through an application to the courts if necessary.

Small amounts probably won't cause a problem, but if we are talking largish ones then it may be looked at.

Normally the OR will only look at preferences that were made up to 6 months before the bankruptcy, but if said preference was given to family/friends/associates then in theory they can look back 2 years instead.