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oblisk
Starting Member
2 Posts |
 Posted - 14 August 2009 : 03:26:31
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Hi,
Hoping someone can offer me advice here.
I have recently been made redundant after 20 years of service, I will have no option but to go bankrupt in a few months since my Bills are over £2000 and I'm going to start having difficulty paying them soon, when I receive my last wage.
Over the past few years I have borrowed a lot of money off my daughter, I always promised that I would pay her back, she has basically put most of it on a card plus her overdraft and now has problems paying back the debt that I CAUSED, since she isn't earning that much, I feel aweful.
I am wanting to give my redundancy payment to her for the debt that I caused around £14000 in total, the redundancy payment will be around £8600.
If I did give her the redundancy payment to PAY OFF her debts BEFORE going bankrupt, could the OR chase her for the money?
She would not be simply putting it into her bank account and buying stuff, it would be used to pay off the debt that I borrowed, so she would not be able to pay it back after she had paid the debts off with it.
What would happen to me, would I have a longer bankruptcy or be prosecuted? Could they apply to the courts to force her to also go bankrupt? She doesn't have any savings or valuables worth selling, car etc.
Many thanks in advance, and apologies for the long post.
oblisk |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 14 August 2009 : 08:00:17
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Hi,
If you gave the money to your daughter then it would be considered 'creditor favouritism' and wouldn't be looked on favourably by the OR.
In reality your daughter is one of your creditors and the OR would expect you to pay your creditors on a pro-rata basis from any income you receive so you may get a slapped wrist from the OR.
The good news is the worst the OR can do is issue you with a Bankruptcy Restriction Order (http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/bro.pdf), which wouldn't increase the time your were BR (12 months) but it would increase the time that the bankruptcy restrictions applied. The longest period the OR can implement a BRO for is 15 years but it shouldn't be anywhere near this long for creditor favouritism.
There is also a section on the BR forms that asks if you have paid one creditor and not others so I would recommend that if you decide to pay your redundancy to your daughter you put the details in this section and put your daughter down as a creditor on the form.
There is a chance that the OR could chase your daughter for the amount that you have given her but, in reality, I am not too sure how likely this is. |
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RHB
Senior Member
1159 Posts |
Posted - 14 August 2009 : 08:00:17
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| I think it would be highly likely that she would need to return the money, so it might not be such a good idea? |
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oblisk
Starting Member
2 Posts |
Posted - 14 August 2009 : 20:04:41
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Hi,
Thank you for your replies, this is what I'm most concerned about, I don't want the OR to chase her for the funds, after she has used them to pay off the debt.
On the other hand the last thing I would want is for her to go Bankrupt as well, as she is hoping to join the police force in the next few months, this would obviously make her chances to join the police force to none.
Regards,
oblisk |
Edited by - oblisk on 14 August 2009 20:06:02 |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 15 August 2009 : 08:35:40
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If you want to be completely sure that your daughter will not be chased by the OR for the money then you would need to pay each of your creditors, including your daughter, a pro-rata amount of the redundancy.
Work out your total debt and then work out each company's and your daughter's percentage and pay then the relevant percentage of the redundancy. In this way your daughter would still get some of the money and there is no chance of the OR chasing her for the money.
What are your future job prospects? If your bills are £2k per month you could last 3 or maybe 4 months on the redundancy and it would be another 3 or 4 months after that before the creditors started to get serious about their repayments. If you think there is a chance of getting another job within 6 months or so then I would wait until then before rushing into BR. You could also speak to the creditors and mention your have lost your job and that you want to make token payments for a few months. |
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Redundancy Payment - Given to relative to pay debt
