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In the statement of Affairs, is the following question:

In the last 2 years have you made any payment to a creditor, other than in the ordinary course of business, with a view to improving the position of that creditor in case you became subject to insolvency/bankruptcy proceedings?

Does this include lump sum payments to flexible loans and credit cards?

I don't think so, but hopefully one of the experts will be able to confirm. When I filled the forms in I took that to mean any payments that might be preferential to one creditor - more for businesses really.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

I have made payments to certian creditors rather than others BUT it can be explained because when I had some money, I chose to reduce my high interest rate cards rather than my lower rate loans, surely this is common sense?

I would think so Andy. That's what I did with my cards and the OR didn't say anything about it.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

I would say that it applies to those lumps sums you decscribe.

Though in asking the question it asks if those lump sum payments would have been made to specifically better your position with a creditor in the event you were considering formal insolvency proceedings.

For instance if you had a lump sum at your disposal and knew (From say reading a forum such as this one) that a certain creditor might present you with problems in an insolvency situation, you might have thought about paying it to them so that they had less influence over your position in say voting rights in an IVA.

So in making those lump sum payments, they are asking if you have deliberately tried to put yourself in a better position with those creditors that received payment from you.



Tell it like it is.

Thanks Skippy.

An off topic question for, I have read through your blog, very interesting and useful. Some of my outgoings are higher than average, do you get a chance to prove they are that cost to the OR?

many thanks

Having now seen your last post, I would suggest that you have NOT deliberately attempted to better your position.

I often get distracted from posting and 4 or 5 replies appear whilst I'm still trying to do just one.



Tell it like it is.

This question is asking you whether you have deliberately preferred any creditors over others which is something that a Trustee in bankruptcy has the power to overturn. You often see people paying back members of their family or friends, at the expense of their other creditors, and the Trustee can then go chasing the return of the money for all creditors to enjoy.

I imagine that this definately does not relate to you Andy.

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

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As far as I know you will be given a chance to justify any higher expenses. I was worried about mine as the food and grocery bill looked high - it was just me going BR and I pay for all the food for me and my partner as that means the bills are split fairly. It was also higher than normal for 2 people as I have very little dairy, and dairy free food is much more expensive. I had all this planned to tell the OR and she didn't even ask! I would say have your reasons ready, but you might not need them!

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/