Shall I go bankrupt or carry on ignoring my debt?

LilyBart

There was a little thread or half-thread a few days ago about inheritance, and I seem to remember that Tigerfeet or Fermi had found that the inheritance would be dated from the date of death, not the date on which you actually receive the inheritance. So if your Great Aunt Bertha died while you were bankrupt, but you didn't receive a cheque until after bankrupcty, the OR would still have an interest in it. At least, that's how I read it. Apologies for interrupting, and welcome to Carlyt. I hope you start to feel less rubbish very soon.
Lily

fermi

dalip wrote: »

I was concerned about this as well and despite people telling me the same thing as you said, i e-mailed the IS yesterday and the reply was Quote:- "If an IPA/IPO is in place you have a duty to inform the trustee of any inheritance and the agreement can then be amended". It seems to be one of those grey areas where it's better to be safe than sorry;) .

I hate it when you get vague replies like that from the IS.:rolleyes:

JimmyTheWig is correct to the best of my knowledge. It is any "income" derived from the inheritance that can be claimed under any IPA, not the lump sum itself.

Where it does become a grey area is where people give up work or otherwise live off the inheritance.

Dalip. If I was you I would reply to that email and pester the IS for a clearer answer. If that is all you received, than that is way too vague and in all honesty completely useless.:rolleyes:

The lump sum can only be claimed as an "after acquired asset" if the person passes way before you are discharged. An IPA has no bearing on the OR's ability to claim an inheritance as an "after acquired asset".

After Acquired Property (July 2007)

xi Can the trustee claim property due under a will?

The trustee can claim an interest under a will which devolves upon the bankrupt before discharge. This means that if the author of the will (the testator) dies during the period prior to discharge of the bankrupt, the trustee can generally claim property bequeathed to the bankrupt under the provisions of section 307.

However, if the will sets up a protective trust the trustee will not be able to claim any property covered by the trust for the bankrupt’s estate. A protective trust usually gives an individual a limited right over something and allows them to use it without giving the right to sell the item in question. It is most commonly used in relation to freehold or leasehold property and allows the beneficiary under the will to live in the property, usually for life, without allowing them the right of sale. Legal advice may be needed to decide whether a protective trust has been created or not.

In all cases, notice of the bankruptcy order (NORD1) must be given to the trustees/executors of the will as soon as possible. If the official receiver becomes trustee a second notice should also be sent in duplicate, with the trustees of the will being asked to return one copy receipted for the file (form NEXE).

Notwithstanding the bankruptcy order, a bankrupt retains his/her right to challenge the provisions of a will under The Inheritance (Provision for Family and Dependants) Act 1975 and the trustee plays no part in such proceedings.

NekoZombie

dalip wrote: »

Neko
I was concerned about this as well and despite people telling me the same thing as you said, i e-mailed the IS yesterday and the reply was Quote:- "If an IPA/IPO is in place you have a duty to inform the trustee of any inheritance and the agreement can then be amended". It seems to be one of those grey areas where it's better to be safe than sorry;) .

I would have a big problem with that as an IPA is simply to do with your regular work income. It would be completely unfair to subject someone to completely different rules to those who were discharged without an IPA. I would seek further confirmation of that because it doesn't sound right to me.

EDIT: Ah Fermi to the rescue!

NekoZombie

fermi wrote: »

JimmyTheWig is correct to the best of my knowledge. It is any "income" derived from the inheritance that can be claimed under any IPA, not the lump sum itself.

Could you clarify this for idiots like me? You seem to be saying what I thought was the case - namely if I come in 20k, its mine as it is a lump sum rather than regular income.

kazwookie

Carlyt

All these loan you took out, can I ask what did you do with the money?

Do you have any items you can sell?

Someone has already list the debt help lines, make sure you give them a ring for advise and help.

For an 18? year old that is a lot of banks loaning you a lot of money.

Well done for posting up your SOA.

dalip

Fermi is i think sorting it, but the way it reads is they can not touch the lump sum but they can take some of it if,i say i stopped working and used it as income or if the amount was large enough for them to claim some of the interest from it. Whichever way i still have to inform the trustee;) if i ever come into money.

fermi

NekoZombie wrote: »

Could you clarify this for idiots like me? You seem to be saying what I thought was the case - namely if I come in 20k, its mine as it is a lump sum rather than regular income.

That is what the Insolvency Service has told me in the past, and it is what seems to be the consensus of opinion on other forums.

Obviously, if you invest the £20k and in doing so receive an "income" from it then that "income" can count towards an IPA. Same would apply if you gave up work for a year or two and lived off the £20K using it as income.

Waspeze

So, for example, .. if you inherit £100k, invest it in a 10% apr savings account (yeah yeah ) .. you would have to pay into an IPA a percentage of the £10k interest earned?

p.s. i've only used those numbers coz they're easy to work out

dalip

Yes that seems to be it but only if you already have an IPA up and running and it's after discharge. Seems it might be best to spend it all quick!

What would happen if you gave it away to say your children?.

Wonder, do they rely on people being honest and telling the trustee in the first place:D

fermi

Waspeze wrote: »

So, for example, .. if you inherit £100k, invest it in a 10% apr savings account (yeah yeah ) .. you would have to pay into an IPA a percentage of the £10k interest earned?

p.s. i've only used those numbers coz they're easy to work out

That is the way the Insolvency Service and an examiner (not one who posts here) explained it to me last time I asked. Plus other forums.

I wish I hadn't deleted the email now.

I know you made the £100k up, but I personally would be tempted to get the BR annulled with that. Not everyone would though.