Are UK involvency service trying to frighten me?

[usa]

my father declared bankruptcy. 5 years ago I lent him money which he has repaid to me over this period - the last payment being 200 pounds in April this year. I am a US citizen. The UK involvency service are demanding that I repay them the money my father repaid me - they say I have received preference over his other creditors. Are they trying to frighten me or do they have a right to do this?

[hara]

was your father bankrupt when he paid this to you,as I understand UK insolvency person is right.All creditors have to be treated in a similar manner one can not treat one creditor prferentially to other irrespective of whether they are family members or otherwise.

Hara.

[Adam Davies]

Hi
In bankruptcy your fathers income and expenditure is controlled by the official receiver and unless they have authorised this repayment to you they have a right to reclaim it.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[scaredkez]

that is correct usa, your father would have been asked what he had done with any money especially if large sums show up on his statement as being withdrawn, the official receiver can reclaim these monies back from the person he has paid to, as the others have said so they are not being treated preferentially, i don't really know how it will affect you being in the USA and what methods they would use to reclaim it.
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[MelanieGiles]

I am assuming that the payments by your father were made prior to his bankruptcy and not after it? Can you confirm whether this is the case.

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

[usa]

I am assuming that the payments by your father were made prior to his bankruptcy and not after it? Can you confirm whether this is the case.

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

[usa]

Thank you for responding. I lent him the money about 6-7 years ago and he has repaid sporadically over the years - I don't remember dates. He did repay the final 200 pounds in late May 2007. My understanding is he declared bankruptcy in April 2007 so I guess I'd have to pay them that amount? or more? As a US citizen I wonder what recourse the Brits would have? I appreciate your help. I don't know what to do. Thank you.

[usa]

I am assuming that the payments by your father were made prior to his bankruptcy and not after it? Can you confirm whether this is the case.

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

[catullus]

I don't think that you've had an answer to your question.
Assuming that your father made the payments to you prior to his bankruptcy the insolvency service is claiming that those payments were a preference to a connected party (you). It's open to your Trustee to commence proceedings against you in the UK and if judgement was given it would probably be with accrued interest from the date of the preference together with a daily rate until you pay it off. If you wanted to settle with the Trustee that would probably be his starting point but he would accept less given the saving on legal costs etc.
Having said all of that even if the Trustee did get judgement against you it would be very difficult for him to enforce it against you unless you had UK assets. In addition US courts are notoriously bad at recognising insolvency laws other than their own and so there is little prospect of this issue affecting you in the US.
The trustee clearly believes that your father has done something wrong prior to his bankruptcy and I suspect there may be more to this than just the payments to you. The trustee may well oppose your father's automatic discharge on the grounds that there have been insolvency act contraventions and that he (and his family) are failing to cooperate with the Trustee

[usa]

I don't think that you've had an answer to your question.
Assuming that your father made the payments to you prior to his bankruptcy the insolvency service is claiming that those payments were a preference to a connected party (you). It's open to your Trustee to commence proceedings against you in the UK and if judgement was given it would probably be with accrued interest from the date of the preference together with a daily rate until you pay it off. If you wanted to settle with the Trustee that would probably be his starting point but he would accept less given the saving on legal costs etc.
Having said all of that even if the Trustee did get judgement against you it would be very difficult for him to enforce it against you unless you had UK assets. In addition US courts are notoriously bad at recognising insolvency laws other than their own and so there is little prospect of this issue affecting you in the US.
The trustee clearly believes that your father has done something wrong prior to his bankruptcy and I suspect there may be more to this than just the payments to you. The trustee may well oppose your father's automatic discharge on the grounds that there have been insolvency act contraventions and that he (and his family) are failing to cooperate with the Trustee

[usa]

Thank you so much for responding. This all greatly concerns me. Can you tell me what is determined as the length of time leading up to bankruptcy? If he declared bankruptcy in April 2007 what length of time do the trustees look at with regard to preferences of payments? thanks again.

[catullus]

The period which covers preferences to connected parties is 2 years from the date that the petition was presented to court so probably back to April 2005.

This is a quite complicated area of insolvency and I find it unusual that the OR is actually persuing a potential preference unless its for quite a substantial sum

[usa]

The period which covers preferences to connected parties is 2 years from the date that the petition was presented to court so probably back to April 2005.

This is a quite complicated area of insolvency and I find it unusual that the OR is actually persuing a potential preference unless its for quite a substantial sum

[usa]

he owes a total of 11,000 pounds. I lent him 2500 pounds about 6-7 years ago - not a big deal - with a proviso to pay me back as and when he could. I have no dates or records of when he paid (when family members visited he would give them money to pass on). The only date I do remember is the 200 pounds he passed over in May so that would be one month after his declaration. I too am puzzled that they are going to these lengths but again, since I have no idea how this whole thing works...........
You're terrific to help by responding - thanks!

[catullus]

To be honest there's not much more I can add without further development.

It will cost the Official Receiver thousands of pounds to bring proceedings and if you live in the US that will only add to the complexity.

Furthermore, even if he wins an action there is little he can do to get the cash out of you, unless as I said earlier, you have UK assets.

By the way, this is a civil matter, so when you do decide to cross the pond, you're not going to be hauled off at immigration.

Keep us posted with anyy developments