I am currently considering Bankruptcy and am concerned that up until six months ago I held £4500 of my grandmothers savings in my name. I was asked to keep it an account in my name so that her application for housing benefits would not be declined. It was kept there for 5 years and was not touched. Is it likely that the courts will not believe me and try to seize my grandmothers saving? If so what can I do avoid this?
if it's in your account at the time you declare bankruptcy then the Official Receiver (not the courts) will no doubt then claim it for the benefit of your creditors.
If you withdraw the funds immediately prior to bankruptcy you would need to explain to the OR where the money had gone. I would not disclose why it was in your account in the first place as you have been party to benefit fraud (not judging you, just stating the facts)which will no doubt cause a whole different problem for both you and your grandmother if and when disclosed.
my apologies, I have taken the time to read over your post again and now realise that the funds have not been in your account for some 6 months.
I take it your bank statement will show that this sum was transferred to your grandmother's (or other) account. The OR will question this as it's his duty to do so.
It's a difficult one, as the funds were in your account it would seem that this was possibly a loan agreement which means it is not permitted to repay the sum. That said, if the account showed the sum was deposited 5 years ago and remained untouched until it's eventual transfer it would seem to support any claim that this was not a loan but monies lodged in your account for safekeeping. It would appear particularly viable as the sum remained untouched despite your own financial difficulties.
The bottom line is that it's virtually impossible to predict how the examiner dealing with your case would view it all.
The problem with this is that you could get your grandmother into trouble by stating the money was lodged in your account for her to avoid having a HB claim declined. Clearly, you should ensure that you don't say that was the reason as, who knows, the OR and the local authority HB dept. might be in touch with each other. Perhaps say it was kept for safe keeping without any particular reason. Send it back out of your account to some othe rperson's account to pass on to your grandmother. Obtain a record of the original amount going in and keep a receipt of the amount going back out and keep it aside before going bankrupt. Then be ready to discuss it if it crops up with the OR. That's my advice.
P.S. What I advised before is honest on your part as it is not your money and has not affected your own insolvency. It is separate to you. However, you cannot state the actual reason it was loaned to you as that would possibly drop your grandmother in it. All you have done is hold money for her. Officially you do not know the reason you are holding it. But you must get rid of it before petitioning. The circuitous route protects your grandmother from getting into trouble. It is a slighlty bizarre thing, though.
I am currently considering Bankruptcy
Posted - 14 December 2008 : 20:22:38
