CAI Trying To Make Friend Bankrupt - Advice Please

[out_of_the_red]

Hi all,

 

My friend has recently had his home repossesed and the sale went through two weeks ago. Another friend saw an ad in the paper that CAI Finance have now applied to make my friend bankrupt and citing the address of the property that was repossesed.

 

The only debt other than Inland Revenue is for a Halifax credit card he stopped paying around a year ago. He believes there is around £3k on this

 

Can he be made involuntarily bankrupt for an unsecured debt and for such a small amount?

 

This all seems very coincidental given that he will soon be receiving some money from the sale of his home

 

Should we call CAI or their solicitor to ask for a copy of the petition? I don't think he's too keen on giving the address of where he is renting a room as he doesn't want any hassle to the landlady

 

The date for the court proceedings is at the end of the month so we have a little time. Its just lucky it was spotted!

 

Thanks in advance

[citizenB]

Has your friend not received a Statutory Demand - this is the first step in making someone bankrupt ? IMHO there is little point in CA1 doing this as there is no property now and they cannot cite the address that has now been repossessed.. !!

 

The answer is yes, they can apply to make him bankrupt for an unsecured debt and such a small amount, although generally this company have previously used this method simply as a debt collection tool, a frightener as you will.

 

Sadly if you want a copy of the petition, then you will need to provide them with an address for it to be sent to.

 

What you really want to know is why you haven't been served with the Stat Demand ?

 

They are supposed to personally serve it or send it recorded delivery ?

[out_of_the_red]

Thank you for your reply

 

No he's received nothing because he hasn't lived in the property for around two months and the postbox on the house was also nailed shut. I'm not really sure where we go from here. I'm assuming if he doesn't turn up in court they will declare him bankrupt by default?

[citizenB]

I cant really add any more than you have stated CB.....but if its not been served correctly then its invalid. Must be served by hand or recorded /registered delivery and signed for and if by post, service can not be said to have corresponded with the obligation imposed by IR 6.3.

 

 

The creditor has four months within which to serve the SD what date was it in the newspaper?

 

Can you please let us know what date it was in the newspaper ?

[out_of_the_red]

It was in there the past weekend with court date of 23.07

[citizenB]

Ok thanks.. Someone will be with you as soon as they can.

[42man]

Have a read of this - http://www.justice.gov.uk/courts/procedure-rules/civil/rules/insolvency_pd

[42man]

(13.3.3)

Where personal service is not effected or the demand is not advertised in the limited circumstances permitted by rule 6.3(3), substituted service is permitted, but the creditor must have taken all those steps which would justify the court making an order for substituted service of a petition. The steps to be taken to obtain an order for substituted service of a petition are set out below. Failure to comply with these requirements may result in the court declining to issue the petition (rule 6.11(9)) or dismissing it.

 

(13.3.4)

In most cases, evidence of the following steps will suffice to justify acceptance for presentation of a petition where the statutory demand has been served by substituted service (or to justify making an order for substituted service of a petition) –

(1) One personal call at the residence and place of business of the debtor where both are known or at either of such places as is known. Where it is known that the debtor has more than one residential or business address, personal calls should be made at all the addresses.

 

(2) Should the creditor fail to effect personal service, a first class prepaid letter should be written to the debtor referring to the call(s), the purpose of the same and the failure to meet the debtor, adding that a further call will be made for the same purpose on the [day] of [month] 20[ ] at [ ] hours at [place]. At least two business days' notice should be given of the appointment and copies of the letter sent to all known addresses of the debtor. The appointment letter should also state that:

(a) in the event of the time and place not being convenient, the debtor should propose some other time and place reasonably convenient for the purpose;

 

(b) (In the case of a statutory demand) if the debtor fails to keep the appointment the creditor proposes to serve the debtor by [advertisement] [insertion through a letter box] or as the case may be, and that, in the event of a bankruptcy petition being presented, the court will be asked to treat such service as service of the demand on the debtor;

 

© (In the case of a petition) if the debtor fails to keep the appointment, application will be made to the Court for an order for substituted service either by advertisement, or in such other manner as the court may think fit.

[out_of_the_red]

Sorry for not coming back sooner I didn't get the update notification. Thank you very much for this information

 

So having read this it seems CAI have presented enough evidence to the court in order to obtain the petition. The thing is we know this to be false because my friend hasn't been living there and has therefore received nothing

 

Can anyone advise on next steps? Should he contact CAI?

[42man]

If they have advertised it then a judge will probably deem this as service. Is there likely to be much equity in the repossessed property ? I know that when houses are repo'd the legal charges / fees can be astronomical, and I have seen stories on here about properties that get sold off at auction for a fraction of their true worth....I think it may be worthwhile contacting them stating that your friend had seen the advert. How you will be able to stave off the petition then I don't know. If your friend ignores the petition then (as does happen on occasions) then a judge will make you bankrupt even if you aren't in court.