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Bankruptcy/"Factoring Fees"

Mad Mac

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Have a situation here in Scotland which I hope someone can advise on.


A relative has apparently been declared bankrupt due to non-payment of "Factoring Fees" to a local authority (she owns a flat in a block which has a mix of council tenants and owners). Current debt in respect of this is around 10K. She is working and has equity in the property. Here's what she told me:


"The trustee person is Xxxxx Xxxx who works for X Xxxxxxx SIP


She has taken details of my earnings, assets etc. The car will likely remain with me because of it's low value.


I had to also detail all of my unsecured debts, including the factors fees they took action for, a total of about 15k. There was a total of about £2500 in the accounts they put a freeze on so that money goes to them.


The options she gave me were as follows


They take the flat from me and sell it to release the equity. Any difference is returned to me.

Someone I know can purchase the flat to release the equity and if they choose they can sell it back to me at such time as I can obtain a mortgage.

A 3rd party pays what is owed, because the fees for her services are constantly added she could give me a rough guide of around 13k if it was dealt with within a month, this would increase as time went on.


She was like a magpie....I was going through my car paperwork for the registration document for the (current car), she saw what was left of the document for the old (car scrapped a couple of years back) and pretty much accused me of still having it and not saying so. I had to explain to her that the section the scrappy sends away had been removed because she thought I was supposed to give them all of the document (what, so someone can commit ID fraud?) but she didn't seem convinced that I don't have it any more. I have a letter somewhere from DVLA about the (scrapped car) being scrapped so if it comes up again I'll look it out for her. Why would I have taken that document with me if I was trying to hide another car! An old banger of a car!"


I'm assuming SIP is an insolvency practitioner.


Can anything be done at this stage to rescue the situation? She's planning to scan relevant paperwork ASAP. Let me know if more detail is needed.

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Hi Mad Mac,


Have read through and my concern is really what your friend is being told about the equity in her property. The course of action really all depends on the figures involved. Without trying to be too nosey, is there a lot of equity available?


I would check out this link and give them a call and talk it through with them - just double check everything your friend is being advised and be sure of her rights.



Edited by Dipply75
wrong link!



I am in no way a legal advisor and only speak from my own experiences and the helpful advice of those in the same boat! :p

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Thanks for the reply. I have no idea as to what, if any, equity is available. The woman who she saw is from a firm of Insolvency Practitioners - I have no idea as to what her role in this is, but doesn't she have some kind of duty to act in a fair and impartial manner? It seems to me, from what little info I have, that this isn't the case. I've passed the link on.

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You are right, you're friend is not supposed to be being 'punished' although it must feel that way. She has my sympathies as it sounds as though this could all have been avoided with proper advice.


Can I ask is this in Scotland or England?


There is also the option of a 3rd party buying out the trustees interest in the property, ie working out the equity and a 3rd party can pay this amount to the trustee so they no longer have an interest in selling the house etc.


This is a better option as it means the Trustees interest is gone - not still hanging around years after the bankruptcy is done.



I am in no way a legal advisor and only speak from my own experiences and the helpful advice of those in the same boat! :p

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