Hi, I am about to start a new job in april untill then I will be getting paid by my current post.. which pays better.. Do I pay my mates back there money and declare my self bankrupt now or wait untill I start my new job.. I am inundated with letters stating how much I owe them.. also will I be able to keep my car which in on finance and is 2,ooo pounds.. I travel about 4 miles to work down country lanes.. Your help would be appreciated. Thanks
I afraid I can't advocate you paying your friends their money then declaring yourself Bankrupt. this is seen as preferential treatment and if the Official Receiver was to hear of this he would go back to your friends and ask them for the money back to be split fairly amongst all your creditors.
I’m afraid if you are to declare yourself bankrupt then your friends debt would be included in your total debt.
As far as your car is concerned as it is less than £2500 and you have a need of it to get to and from your place of work then this would be safe and could be claimed as exempt property.
firtly congratulations on the new job, this is always an exciting time but one needs to be very careful in making hasty decisions during this period.
1. If you pay your mates back prior to petitioning for your bankruptcy this act would prefer your friends over your other creditors and is deemed to be unfair. Therefore the official receiver could actually overturn these "transactions" and require your friends to repay the money you have given them. You will also find in the statement of affairs a section requiring you to detail any payment to a creditor prior to Br made to "improve" your position with them.
2. How much do you pay for the car HP and is there any equity in the car? In reading your HP agreement you will probably find that the agreement becomes invalid if you become Br and therefore they would want the car back. You may want to review purchasing another car prior to Br and provided that this is a low value - under 2500 - this would be excluded from Br because you need the car for work even though you are only 4 miles away.
There are lots of actions that can be taken to reduce creditor pressure and make the situation more manageable. But before taking the br step you should really prepare very carefully so that everything is organised and you have an alternatiev car available.
Hope this helps
Paul Johns Assisted Bankruptcy Specialists Reviva UK www.revivauk.com
when to declare
Posted - 24 March 2008 : 20:06:24
