Bankcruptcy question

Gaz1990 · 7 December 2019 at 9:36AM

Hi just a quick question if someone could help.
1 year ago i borrowed 10k of parents for a car but
6months later i sold the car and give them most of the money back as i lost my job and hit financial difficulties.
I am applying for bankruptcy will they question this.
Thank you

Flyright · 7 December 2019 at 11:00AM

Yes. The OR will question this. If you used that money to pay your parents and did not use it to pay any other creditors then it is likely to be pursued as a preference payment.

Gaz1990 · 7 December 2019 at 11:13AM

Ahhh
Ive never missed any payments thou to any of my creditors.
Just circumstances have changed and going forward i can no longer afford.

Gaz1990 · 8 December 2019 at 8:36AM

Hi morning
Has anyone on this forum got advice?
Its causing me sleeping nights this.

luvchocolate · 8 December 2019 at 1:00PM

Hi its usually quiet here at weekend you will get fantastic advise shortly, please try not to worry a couple of days will make no difference to your situation

Gaz1990 · 8 December 2019 at 1:07PM

Thank you&#55357;&#56397;

sourcrates · 8 December 2019 at 2:26PM

Gaz1990 wrote: »

Hi just a quick question if someone could help.
1 year ago i borrowed 10k off parents for a car but
6 months later i sold the car and give them most of the money back as i lost my job and hit financial difficulties.
I am applying for bankruptcy will they question this.
Thank you

Hi,

When deciding whether payments should be treated as preferential, consideration is given to the length of time between the transaction and the onset of insolvency/bankrupcy.

There are two aspects to this :

If the transaction involved a "connected party" such as a relative of yours, the timescale is two years before the onset of insolvency.
For non-connected recipients, the time limit is six months.

You should not really worry about this, the OR may ask you for details, they may not, it won`t affect you going bankrupt, the only penalty, if any, would be an extended IPA.

Or you could wait 12 months and it will be forgiven.

Gaz1990 · 8 December 2019 at 2:42PM

Thank you sourcrates.
What actually happened was 1 year ago i bowrrowed 10k of parents.
7k for a car and the other 3k was to pay off my overdraft which i was minus 3000
6month later i sold the car a gave them
6500 back. I still owe them money to this day.

fatbelly · 8 December 2019 at 2:52PM

Yes, your problem is that from the OR point of view, your parents were just one party amongst many that you owed money to and when you sold the car you paid them and the overdraft but not the others. It's not a major problem for you - the worst that would happen is that you would get an extension to your discharge for a few years.

However, they could try to recover the £6500 from your parents, which is what you want to avoid. Could you wait 12 months, to give you a better argument? Is bankruptcy avoidable? Have you posted a statement of affairs?

Gaz1990 · 8 December 2019 at 3:35PM

Hi thank you for your replie.
I understand were you are coming from but at the time i was completely solvent just wanted to reduce outgoings. I have remained completely up to date with payments off all creditors moving forward thou this will not be possible.
i will post a soa&#55357;&#56397;

Gaz1990 · 8 December 2019 at 3:48PM

I have posted our soa below
We live with my parents but we are trying to find somewere to rent.

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1500
Partners monthly income after tax....... 550
Benefits................................ 150
Other income............................ 0
Total monthly income.................... 2200

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 700
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 100
TV Licence.............................. 0
Satellite/Cable TV...................... 30
Internet Services....................... 0
Groceries etc. ......................... 550
Clothing................................ 30
Petrol/diesel........................... 150
Road tax................................ 17
Car Insurance........................... 80
Car maintenance (including MOT)......... 40
Car parking............................. 15
Other travel............................ 0
Childcare/nursery....................... 350
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 20
Entertainment........................... 30
Holiday................................. 30
Emergency fund.......................... 20
Total monthly expenses.................. 2232

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1400
Other assets............................ 0
Total Assets............................ 1400

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Bank Loan......................21000.....300.......0
Bank loan......................8000......270.......0
Credit card....................3000......70........0
Parents .......................100.......0.........0
Creation credit................4000......80........0
Very...........................800.......50........0
Total unsecured debts..........36900.....770.......-

Monthly Budget Summary
Total monthly income.................... 2,200
Expenses (including HP & secured debts). 2,232
Available for debt repayments........... -32
Monthly UNsecured debt repayments....... 770
Amount short for making debt repayments. -802

Personal Balance Sheet Summary
Total assets (things you own)........... 1,400
Total HP & Secured debt................. -0
Total Unsecured debt.................... -36,900
Net Assets.............................. -35,500

Bankcruptcy question

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