apologies if this is outside the remit

[bikananalt1]

I’m new to this forum so apologies if this question is considered outside the remit of the forum.

Someone owes me about £95 k. He disputes the sum and says that he believes it is closer to £75 - 80k. He has been dragging his feet for almost 3 years about paying this. I was living abroad for a long time. I came back to this country about a year ago. There is some ambiguity in some of the written agreements between us concerning the investments that led to the debt. About 75k of the debt is beyond dispute. The remainder is open to interpretation and includes interest on the debt over the last 3 years.

I got tired of asking him nicely for the money and I’ve hired a debt-collecting agency. The next stage is that we issue a Statutory Demand and then if necessary threaten him with bankruptcy. He says that if I do that he will fight everything tooth and nail and will drag things out for years. The alternative that he suggests is that he offers me a smaller sum now (say 25 – 30k) and the remainder in installments over the next year or two. Considering how much trouble I’ve had getting the money I’m reluctant to prolong the agony even further.

As far as I know I am his only creditor.

He owns two properties that I know of. I estimate their value is about £200k (minimum 150 k) but he claims they are both heavily mortgaged. At the start of 2006 he transferred 2 other properties plus a Rolls-Royce car to his wife’s name. I estimate that their combined value would be about £300k (minimum 250 k).
He claims his monthly income is about £4k. I don’t know how accurate that figure is.
To me it seems a straightforward matter that he borrows money based on his current assets and income to pay the debt. In that case he could pay me straightaway. Even if he offered me £75k now I probably would accept it. I’m very suspicious about his idea to pay me over the next year or two. He claims that this is the idea of his accountant who says that it would cause him all sorts of tax problems if he paid everything at once. My view is that this is his problem not mine.

I’ve heard somewhere that if assets are in a spouse’s name they cannot be touched in a bankruptcy proceedings. Is that correct? It does not make sense because if that is the case anyone could just transfer all major assets to a spouse and then built up large debts (say with a credit card company or whatever) and then say ‘go ahead bankrupt me, I have no assets’.

It is a case of bluff and counter-bluff. He is calling my bluff about bankruptcy. He claims that it could take up to 5 years and there is no guarantee that I will get everything I want. On the other hand if I accept his pay by installments option I’m afraid that after a few months he will stop paying and the problem will resume.

My main question for this forum is - can someone drag out bankruptcy proceedings for years and years if they have the assets but just don’t want to pay?

Many thanks for any advice or suggestions

[MelanieGiles]

OK this is slightly outside the remit of the forum, so I'm just going to give you a personal opinion of what I would do if I were in your position. If you can afford the bankrupty petition fees, then this seems to be the most sensible route. It crystallises the position, and allows you to deal with someone commercial - ie a Trustee in bankruptcy, who will look into your case and investigate the claim. They also have powers to trace and seek out assets, and from the facts you have presented it seems that this is necessary.

Now what I would do if I were to be appointed the Trustee of this case. Firstly, the debtor would have to produce a detailed statement of affairs, and the Trustee will also look into all property transactions which have occured during the last 5 years - or more if there are strong grounds to suspect assets have been moved out of the reach of creditors. A DVLC search can also be carried out with regard to motor vehicle transfers. The Trustee is obliged to follow up all lines of enquiry which may led to assets on behalf of the creditors, and does have very wide powers to bring your former colleage to account for his actions.

As principle creditor, you are allowed to choose an insolvency practitioner of your choice to act as Trustee, and you can then assist the Trustee with his/her enquiries. Make sure that you find someone with experience of carrying out this sort of investigation.

Hope this helps - if you want to ask anything else please post.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[gimmewine]

To be honest, I would be inclined to seek legal advice as a matter of urgency on this one. You may be lucky to find a member who is in the legal profession, but it's pot luck. Why not try a free half hour consultation with a solicitor. They will be able to advise you on the amount to claim, also on whether the transfer of property to his wife can be overturned at bankruptcy proceeding. If he has assets to pay the debt, I don't think bankruptcy is an option anyway, but I am no legal expert. I would imagine getting a court judgment to prove the debt would be your first port of call though.

[MelanieGiles]

Bankruptcy proceedings are a real option for this poster - as the debtor has acknowledged that a debt is already due, but you are correct that judgement will need to be entered into first. This should not present a problem.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk