www.iva.co.uk

Hi, basically i have a debt of £30,000, aand im looking to go bankrupt. I have relatives which i also borrowed money from. I had a house, but sold it last year, as i couldnt afford to pay the mortgage, and i had debt with my family members. So with the money i got from selling the house, which is around £30,000 i settled payments to my family and friends.

I was wondering if i go bankrupt, what would the court ask about me selling the house? will they know? and will i be asked about where the money went? and also will the court accept the reason for the money i got from my house, was given to the people i owed money to. I currently have £30,000 in debt with 3 creditors and 1 loan, which are currently with a debt management company, and due to the ressesion its getting harder to cope, i have gone over my expenses over and over again, and i can only pay a maximum of £80.00 a month, so would IVA be the best option for me or should i go about being bankrupt. Currently i have a part time job, where i work 16 hours, and recieve £80 a week, i also have a joint claim on workers tax credit with my wife. The place where i live is in my wifes house, which i pay rent to. So i was wondering if i declared my self bankrupt, would the courts seize my wifes assets, as i dont want to drag my family into this mess.

I will be really grateful if you could contact me, thank you

Hi there and welcome to the forum

You have a problem in bankruptcy, in that the Trustee will probably look to unravel the distributions you made to family members, which appear to be preferential payments.

The Trustee has powers to recover these moneis from your relatives, and then distribute them evenly amongst your creditors generally - which will include your relatives.

Even if you were to enter into an IVA, which will not be an option with a disposable income of £80 per month, these transactions would have to be disclosed, and you may not gain the other, non-associated, creditors support.

A DMP might be an answer - but you will be paying for ever. It is a real shame that you did not use the proceeds from the sale of your property to effect an overall settlement with all creditors which could have been effected via an IVA. Would they return the money you paid to them to enable this to be done - in the knowledge that they would have to pay this back if you were to go bankrupt?