bankruptcy due to civil claim, prior gifts
leonardob
Posts: 2 Newbie
Hello,
I am about to be sued in a civil claim and if i lose i will
not have enough money to pay out.
I wanted to know if once bankrupt any gifts made to my partner prior to both the civil claim being filed against me and prior to bankruptcy could be reclaimed as part of proceedings.
I am currently solvent.
Regards,
I am about to be sued in a civil claim and if i lose i will
not have enough money to pay out.
I wanted to know if once bankrupt any gifts made to my partner prior to both the civil claim being filed against me and prior to bankruptcy could be reclaimed as part of proceedings.
I am currently solvent.
Regards,
0
Comments
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IANAL but AIUI if these "gifts" have been given in knowledge of potential claims against you, I'd have thought so because otherwise it would be trivial to escape the consequences of debt.
This article (no idea of its veracity) says they can go back five years.0 -
i see your point but my understanding was that you had to be insolvent at the time of the transfers for them to make a claim on previous transfers.0
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AnotherJoe wrote: »
Seems accurate to me.
If a bankrupt tries to dispose of assets either by making a gift, or selling them at less than their true price, this would generally be referred to as a transaction at an undervalue (S.339, Insolvency Act 1986), and again, can be set aside if it took place at any time within 5 years prior to the making of the bankruptcy order.
https://www.thegazette.co.uk/insolvency/content/1003080 -
i see your point but my understanding was that you had to be insolvent at the time of the transfers for them to make a claim on previous transfers.
I don't believe so.
The 'relevant time' is defined in S.341, Insolvency Act 1986 which is defined as "at a time in the period of 5 years ending with the day of the presentation of the bankruptcy petition on which the individual is adjudged bankrupt".
It does go on to qualify that in s341(2).
But it also defines an insolvent as someone where the "value of his assets is less than the amount of his liabilities, taking into account his contingent and prospective liabilities".
A civil claim currently in progress would be a contingent and/or prospective liability.
The question would be, why do you want to give away these assets?0 -
Ooooh please sir I know the answer let me ....0
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I wouldn't risk it without taking specialist advice. You could also be laying yourself open to getting a bankruptcy restrictions order for attempting to place your assets out of your creditors reach.0
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IMHO it depends on that you mean by "gifts" to your partner.
If we are talking a new bag for Xmas in the normal course of a relationship, then absolutely not.
However, if we are talking direct transfer of significant amount of money or property with no corresponding consideration, then clearly such payments would be (rightly) attacked as a deliberate attempt to put assets out of reach0 -
Apart from going back 5 years to reverse a transaction.
The OR can also annul your BR if they feel you were not insolvent at the time, as you attempted to dispose of assets, and this can happen after discharge.0
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