Bankruptcy - Payment Request

[claretfan]

I would be very very grateful for anyone that can help me with this.....

I had to declare myself bankrupt in July this year following a seperation from my husband last year. Before the bankruptcy our house was sold and we jointly split the money left. From my share - under the advice of Citizens Advice Bureau - I repaid a loan to my sister for £4000 in December 2006, as they said that I had a duty to repay friends and family first.

This was declared to the Reciever but they have now written to my sister saying that this was a 'preferential payment' and she has to repay this amount to them - how the heck can this be right??

That would leave her £4000 out of pocket - which she doesn't have, she is turning on me (and I can't blame her) and she hasn't even told her husband because he would hit the roof!!!

How do we best approach this? If she has to pay it back to them, she would have to get a loan which I would have to pay and then that doesn't help me get out of my situation at all!!!

[payingonlyencouragesthem]

Originally Posted by claretfan

I had to declare myself bankrupt in July this year following a seperation from my husband last year. Before the bankruptcy our house was sold and we jointly split the money left. From my share - under the advice of Citizens Advice Bureau - I repaid a loan to my sister for £4000 in December 2006, as they said that I had a duty to repay friends and family first.

Either they didn't know you were going bankrupt or you had a very stupid adviser. The OR is correct - when you go bankrupt all your assets have to be lumped together and distributed evenly among all your creditors. You can't prioritise your friends and family - doing so could actually be fraudulent. However, looking on the bright side I would have thought they would have virtually zero chance of having any legal redress against your sister. She should just sit tight and ignore them and don't even bother mentioning it to her OH.

[claretfan]

Thanks for that.

Should she or I contact the reciever to let them know the situation?? I have some paperwork from the Citizens Advice but nothing that confirms what I was told - but I know this is definately what I was told, that loans from friends and family take priority.

My sister is on the verge of joining the police force (which you can't do if you are bankrupt) and she is worried that this might affect her chances of getting taken on or even get her kicked out if she is successful!!

[payingonlyencouragesthem]

She wouldn't automatically be bankrupted in this instance. She might get a CCJ but I doubt the police would refuse to hire her or decide to fire her on this basis. These employers make a lot of noise about credit and CCJ's but as long as you disclose the problem up front it's usually not an issue.

[claretfan]

Just to make sure....

I sold the house in October last year and paid my sister back in December. I didn't declare my bankruptcy until July this year - 8 months later. Also before I went bankrupt I had continued to make some payments to my other creditors too - so would they ask for this money back from them too to join the pot??

And exactly what should my course of action now be to try and resolve this - write to the Recievers, the Court or who??

This really will tear my family apart - and I really don't need this on top of a nasty divorce!!

[payingonlyencouragesthem]

Originally Posted by claretfan

Just to make sure....

I sold the house in October last year and paid my sister back in December. I didn't declare my bankruptcy until July this year - 8 months later. Also before I went bankrupt I had continued to make some payments to my other creditors too - so would they ask for this money back from them too to join the pot??

And exactly what should my course of action now be to try and resolve this - write to the Recievers, the Court or who??

This really will tear my family apart - and I really don't need this on top of a nasty divorce!!

If your sister has the money sitting traceably and visibly in an account it might get taken off her. However if she obviously doesn't have that kind of money at all it'll probably be okay - they won't make her borrow it and she couldn't possibly have known 8 months ago that she was queue barging a bankruptcy line. This really doesn't look as bad as you think it is. It would only turn nasty if it looked as though your sister was helping you hide money from the OR which doesn't seem to be the case here.

[cromwell3]

Originally Posted by claretfan

Thanks for that.

Should she or I contact the reciever to let them know the situation?? I have some paperwork from the Citizens Advice but nothing that confirms what I was told - but I know this is definately what I was told, that loans from friends and family take priority.

My sister is on the verge of joining the police force (which you can't do if you are bankrupt) and she is worried that this might affect her chances of getting taken on or even get her kicked out if she is successful!!

Just joined and came across your post . I am in the same situation now!! the trustee wants £10,000 back on a loan I made to my brother it is really starting to worry me > May I ask what happened in your instance some advice I have been offered is to ignore or make them an offer

[cromwell3]

Is there anybody who has had a Trustee take them to court for preference payments -have had some feedback but worried about demand and the process that i may have to go through?? Thanks