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My daughter got into a lot of debt recently and i helped her out by lending her 4000 pounds to try and clear some of the debts, however, my daught managed to pay me back and has recently gone bankrupt, the insolvency agency know about this and are now demanding i pay them the 4000 as the money should have been paid to them and distributed to other creditors. Where do i stand with this?

Hi stephanie and welcome to the forum

I am afraid that your daughter has effected a preference in your favour, and the OR is quite rightly asking you for the money back. Whilst this may seem harsh, if your daughter knew that she was going to declare herself bankrupt, she should not have favoured you over the other creditors. I fear that you will have little choice but to hand the money over.