Financial Help through Bankruptcy

[wen]

Quick question or 2... up until now, my father has been helping us keep everything on the straight and narrow until we can both attain better paying jobs. Looks like Mr. wen has his sorted, subject to a medical, and providing I pass my interview I should be on the way too!

My question is that should we both be successful and then qualify for an IPA, are we allowed to 'pay-back' the money that my father has given us over the last couple of months since declaring BR, or will the OR just put it towards the IPA calculation? I am not trying to avoid an IPA, it is just my father isn't having the best of times either, and has been very generous keeping us on our feet, so would like to be able to pay him back and return the favour.

Also, what happens if your money increases, and you have a surplus which could be used in an IPA, but you then need to buy a car (or borrow money off family to be repaid asap)... the car being needed to allow for the new job to be possible. Can this be paid back as discountable from the IPA either?

[MelanieGiles]

You will need to discuss this with the OR as you are not allowed to take credit during a bankruptcy - which is in effect what you are doing albeit it is from your father. I would think that it is extremely unlikely that you will be allowed to repay this until you are discharged.

[Skippy]

I've borrowed money from Dave while I was BR and I am paying him back out of my surplus. I didn't see there was a problem as although it was more than £500 he knew I was BR and the wording states that you cannot borrow more than £500 without telling the person you are borrowing from.

[ianmillington]

Yes - there is nothing to stop a bankrupt borrowing money so long as there is transparency and disclosure. Failure to tell the prospective creditor about the BR is a criminal offence though.

I think it's worth a try at providing within the I&E for some repayment to your father given that it's a post - bankruptcy debt. After all, the OR may well have sat back for some time (how long?) until you have got your income up and will thereupon claim for 3 years.

The worst case scenario is that the OR will say no, but make sure there's evidence that dad knew about the BR.

The car. Again there is justification for the I&E to take account of vehicle repayments given that there probably wouldn't be an IPA without it. I suggest you discuss it with the OR before you go ahead.

How long have you been bankrupt, Wen?

Ian

[wen]

Hi Ian,

My father knows we are BR. It's not the fact it was a debt to be repaid, I suppose it's a gift really, but if an IPA was borderline, i'd like to be able to give some back to him. I'm sorry I would put him above my creditors - I know that may well not sit well with some though.

The car however is a very real issue. We may well need the 2nd car, as the new jobs may not be doable without it. There may well be no IPA with the 2nd car either. We've only been bankrupt 6 weeks, and the OR said she had no interest in an IPA at the moment, but would review I & E again before discharge.

Someone may lend us the money for a 2nd car, but it's the case of if we agree to pay them back say £100/month, it's whether we can include this in the Expenditure.

Will speak to the OR, though.

[go_4_broke]

Hi Wen

If as Ian says above there is nothing wrong with acquiring a post-bankruptcy debt (and subject to the rules given I don't think there is) then it appears reasonable to expect that there will have to be a level of repayment.

If the OR disallows reasonable repayment then they could be accused of pushing you towards a second bankruptcy.

If you ask the OR they will probably advise you not to get into further debt in the first place but faced with a fait accompli (which makes an IPA marginal) my guess would be they will quietly lose interest, especially if the loss of the car would mean no IPA anyway.

Best Regards, Simon

[Reviva UK]

Hi Wen

Suggested scenario to make everyone happy.

Borrow 900 from father for second car.
Repay over 10 months at 90 per month ( which is your disposable allowance before an IPA comes into play)
MAKE SURE YOU HAVE A SIGNED DOCUMENT FROM DAD CONFIRMING THAT HE KNOWS YOU ARE BR - Criminl offence to borrow 500 or more while in br without advising them you are br.

This way you can legitimately use your allowed disposable income to repay the debt.

just an idea.

[ianmillington]

Makes sense to me.