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Alex J.
Alex J., Solicitor
Category: UK Bankruptcy Law
Satisfied Customers: 3630
Experience:  2 Years Insolvency Litigation
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Hi Im about to be made bankrupt in a couple of weeks. I have

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Hi
I'm about to be made bankrupt in a couple of weeks. I have tried an IVA which hasn't worked. I will still try to come to some sort of arrange but I don't hold much hope.
We have been living our lives as normal for the last couple of months holding out that the IVA would work (The IVA was based on the sale of two properties and not on any income).
In the last few months we have a big family holiday
Paid back largish loans to friends and family that have been lent us money during the petition
Bought various items for Christmas etc

Will this be investigated by the OR?

The main creditor is a bank on a project that went wrong which we owe hundreds of thousands of pounds and nothing like what we have spent in the last couple of months
Hi,

Thank you for your question and welcome back to Just Answer.

The loans from family and friends approximately how much were these in total?

Will the bank be repaid in full and what is the value of the other creditors?

Is it likely a private trustee will be appointed?

Kind regards

AJ
Customer: replied 4 years ago.

The loans from family and friends approximately how much were these in total?


 


15k The loan was to help finish off a project so help sell for the IVA which we hope would bring in 10 times this amount

Will the bank be repaid in full and what is the value of the other creditors?


 


No pounds in pence. We have a limited number of creditors - Banks, Credit Card, small inland rev (CG) and a few bills and family and friends previously to the petition (c500k)

Is it likely a private trustee will be appointed?


 


I would of thought so as we have a number of properties that are as a whole in negative equity which were left out of the IVA but obviously would be in the bankruptcy, but I would assume you would never 100% know and it depends on the OR


 


 

Hi,

Thank you.

The Official Receiver is obviously obliged to investigate your affairs.

If they look at the loans made by your relatives and friends prior to your bankruptcy and these loans have been repaid this could be deemed a preference under S.240 of the Insolvency Act 1986. The effect of the preference would be that the trustee (or OR) could unwind these transactions.

A private trustee is likely to have resources to investigate these types of transactions.

Is there any form of paper work in place to show these loans had some bonafide commercial reason and they would only be repaid from the finished projects?

Kind regards

AJ
Customer: replied 4 years ago.

Yes there is for the loan


What about the holiday?


 


Will the OR go through previous bank statements even though I am not making myself bankrupt? Should I have not taken the holiday?

Hi,

Thank you.

It does not really matter that you have taken the holiday it is done now and it has not added to your indebtedness. I presume there was nothing in your IVA that said you cant take holidays? Was the holiday paid out of your account?

The OR may only look to challenge previous financial transactions if you actually go bankrupt. Otherwise you will be expected to adhere to your IVA.

Kind regards

AJ
Customer: replied 4 years ago.

Thank you


Is it automatic that on our first meeting with the OR he will ask for bank statements?

Hi,

Thank you.

It might not be at the very first meeting but S.289 of the Insolvency Act 1986 tells you what he is required to investigate http://www.legislation.gov.uk/ukpga/1986/45/section/289
In turn S.291 of the Insolvency Act 1986 details your duties
http://www.legislation.gov.uk/ukpga/1986/45/section/291

The more helpful you are the less likely the OR will feel the need to take a more drastic action such as a public examination of your affairs.

Kind regards

AJ
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