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jonnym
Starting Member
19 Posts |
 Posted - 29 April 2009 : 14:30:32
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Hi, I've just heard that we may be facing bankruptcy restrictions due to the way we dispersed (spent) an inheritance that we received during the run up to our bankruptcy in March '09. Essential we had been fighting a debt situation since '06 and ceased making contributions to our creditors around the third quarter of '08. My mother suddenly died in October and we inherited approx 60k (against a 200k debt problem). Initially, I made an offer of 25p in the pound as full and final settlement, but this was rejected. I then tried to negotiate a lump sum IVA, but didn't have enough funds left by December '08, when it was ready to start being negotiated. This was because we were also living on the money as I was out of work. We then spent the money setting ourselves up in a rented house from the December onwards. When the money ran out, we filed. The whole situation is a real mess as I have been fighting with alcoholism for a couple of years and my wife thinks I've been through a nervous breakdown. My questions are:
1) Can anyone point me in the direction of material that defines misconduct? We accept that the money was spent without regard to our creditors, but we didn't do this deliberately. We tried to negotiate whilst our world was falling apart, due to my state of mental health and the loss of both my parents over the period. We also stopped paying the creditors in the hope of forcing them to accept a settlement, rather than to deny them any money, and this was prior to my mothers death. Then we found ourselves in the situation where we had too little left to make any difference to our situation.
2) Is it worth fighting and going to court and can you receive legal aid? Can anybody recommend legal representation that may help.
3) Do the BR's have any impact on the setting up and duration of an IPA/O? We don't currently have one as I am unemployed.
4) Apart from the obvious impact of the restrictions; no directorships, can't become an MP, etc; and the fact that it extends the record of the bankruptcy on your credit record, 6 yrs plus length of restrictions, do they have any other significant impact that I need to be aware of.
Appreciate any help/thoughts/advice. Jonny
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xmas baby
Average Member
537 Posts |
Posted - 29 April 2009 : 16:51:41
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I have not been issued a BRU yet, but I am expecting one. Can anyone tell me though, if I am issued with a 3 year BRU, does that mean my bankruptcy credit record will be 9 years in total rather than the usual 6 for non-BRU bankrupts?
xmas baby |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 29 April 2009 : 18:18:36
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Hi jonnym,
1) From what you have said I doubt if you would be liable for a BRU. You have tried to appease your creditors with a F&F and also an IVA so this will be looked on as trying to resolve your financial issues. It also sounds as if you spent the windfall on general living expenses rather than luxury items and this would also be to your favour.
2) If you do end up with a BRU you can go to court if you feel it is worth fighting. I would wait for the court's decision to see whether you do get a BRU and for how long and then speak to the CAB/CCCS to find out your options. Further information is also available at http://www.insolvencyhelpline.co.uk/bankruptcy/bankruptcy-restrictions-orders-and-bankruptcy.php
3) The IPA period runs for 3 years and (I think) this is regardless of the length of the BRU but you could always check this with the Insolvency Helpline (same link as Q2).
4) The link in Q2 has more info on the restrictions. |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 29 April 2009 : 18:22:14
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| xmas_baby - The BRU will only lengthen the time to be discharged from BR and not the credit record i.e. if you have a BRU for 2 yrs then it will take 3 yrs to be discharged from the BR rather than the usual 1 yr. |
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jonnym
Starting Member
19 Posts |
Posted - 29 April 2009 : 21:41:31
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gettingoutofdebt - I think it is the other way round. You are automatically discharged after one year regardless of any BR, but any restrictions add to your credit record. So a 4 year restriction would mean 10 years on your credit record. Quite a hit.... Jonny
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 29 April 2009 : 22:10:10
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I'm pretty sure that you are right jonnym.
The glimmer gets brighter all the time
Jan
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 29 April 2009 : 22:48:15
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Hi
not the bearer of good news I am afraid.
I believe the OR will want to know what you have done with the 60K since October 2008. That equates to 10k per month.
If you have made payments to the creditors that will help. However the OR will balance your normal monthly outgoings as per your Br petition and offset these against the 6 months without work.
They will then take into consideration the cost of move, removal contractors, rent deposit , advance rental extra for pets , etc etc etc.
The amount left over is going to be the problem
They will be trying to see if you knowingly spent it rather than make some payments to the creditors, or wether they beolieve you have some left in a biscuit tin.
Without all the facts it is difficult but I suspect a 6 - 8 yr BRU is what you might be looking at
Perhaps you should speak to one of the forum experts off line to go through the whole situation carefully .
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
http://www.revivauk.com
Real People ..... Real Debt Solutions
www.revivauk.com |
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jonnym
Starting Member
19 Posts |
Posted - 29 April 2009 : 23:14:15
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Hi Paul, not a nice thought to be going to sleep with.......... ;-) The OR investigator who interviewed us felt is was a very marginal case and that we would face the minimum restriction, if any. Pretty much all of the money is accounted for, except about 6k spent in cash over the period. It is also not that outrageous compared to the previous 6 months, where I earnt a similar figure before travel expenses. What interests me is where it is written down that if I receive a wind fall I have to give it to my creditors. I thought BRU where more aimed at people obtaining credit and spending with no intention of repaying it, rather than people spending a lottery win, or in my case, using an inheritance to live on and relocate. Most of our credit was obtained in 2006 following a crisis with one of my daughters. Do you know where I can find the original legislation? I would like to know what conduct it is primarily aimed at.
I think tomorrow I will quiz the OR to identify exactly why they feel there is a case of misconduct and under which clauses of the legislation they are interpreting this.
Thanks for the feedback. Jonny
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
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jonnym
Starting Member
19 Posts |
Posted - 29 April 2009 : 23:50:21
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Thanks for that Paul. It looks like I need further clarification for sure. None of the 150 or so reasons for the restriction order seemed to apply to us. There is a paper trail and full cooperation.
Time to clock off, Jonny :-)
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Threat of bankruptcy restrictions
