i have heard that if you go br and have paid back personal debts the or can demand this back.what power does he have over other people outside of br..?i have been paying back credit card and loans for years but not personal as they have put no pressure on. it could be argued i have been treating official debt in a preferential manner at the expense of personal. i borrowed money from a now x girlfriend 2 years ago which i can prove. i have some shares left which would just about cover her debt, if i didnt pay her back it would ruin other personal relationships.i have not as yet entered iva or br but considering both. any ideas??
Firstly the Official Receiver can only pursue a preference if you are actually bankrupt, and to be successful they have to prove that there was clear intent to put that creditor in a preferential position - and not just that someone was paying the debt because they were being harrassed by creditors.
If the repayment is to an associatde - most likely a family member, then intent is assumed, but an ex girlfriend would not fall into this category.
mel sorry if im being thick but does that mean its ok to repay an x girlfriend with my little remaining funds before entering iva or br. the last thing i want is her being harassed as she has been so kind and has no idea of my problems
Sorry - that is not what I mean at all. When you have recognised that you are insolvent, then you must treat all creditors equally and fairly - including your ex-girlfriend. So if you are going to repay her, then you must repay the same (pro-rata) to your other creditors.
in that case what powers would the or have to recoup the money from her. i feel obliged to repay her but i dont want her harassed, she has had nothing back while all other creditors have
They have powers given to them by statue if you are bankrupt, otherwise there will be no opportunity for restoration in the event that you go ahead and prefer her - but you may find it difficult to find a professional then willing to take you on as a client afterwards.
does that mean the or can demand the money back from her legally even though it was hers in first place. also i take it there are no powers to recall if entering an iva..
Yes - they legally could pursue her for monies that you repaid her. She is in no different position than the other creditors here.
If you enter into an IVA you have to make a declaration as part of the proposal that you have not deliberately preferred any one or more creditors. This will enable your creditors to determine whether they wish to support your proposals or not.
I think there is a case for saying for saying you have already 'preferred' your commercial creditors as you state.
Therefore if you repay your ex (especially if not in full) you could argue she had been previously disadvantaged and you were simply re-levelling the playing field.
Do some rough sums to work out roughly how much you can reasonably pay her without making the whole thing look lop-sided, but bear in mind if you have been paying other creditors for some time then you should allow her some 'interest'.
This could bump up the figure you can pay her.
Best Regards
Last edited by go_4_broke on Thu Nov 20, 2008 12:29 pm, edited 1 time in total.
