Bankruptcy. Avoiding debt and hiding stuff.

Bankruptcy. Avoiding debt and hiding stuff.

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JustinP1

Original Poster:

13,330 posts

229 months

Wednesday 27th August 2014
quotequote all
This really is, not me, or a friend! wink

Some of you may be aware of my old thread where my ex-landlord failed to give us back our tenancy deposit, conned money from us and left us with huge electricity bills and no heating for a whole winter.

As they were well known debtors, backed up with a dubious title they bought, insisting that everyone referred to them as 'Lord and Lady X' I did think that things were running a bit easy when my hearing date for the county court claim was up in October.

However, from a Google search, I have found that 'Lady' X has made herself bankrupt a few weeks ago. The claim is against her as the husband passed away.

To give some background, in the last year I know of £100k of very visible assets that have been 'disposed of', the daughter has been on a 5 month round the world trip earlier this year, and, by sheer co-incidence I noted that removal vans were there at the 12 bedroom manor house removing items on what turned out to be the day before the bankruptcy petition.

I wasn't contacted by the Official Receiver as I wasn't even noted as a creditor on the application that went before the court!

An independent person with knowledge of the couple's dealing has come up with the theory that the bankruptcy has been planned for some time, with the sale/removal of assets with the monies pocketed and hidden, so in 12 months time she can phoenix while wiping off all debts. Including mine.


Any advice chaps? Anything useful, and even just support will be much appreciated!

elanfan

5,516 posts

226 months

Wednesday 27th August 2014
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All I know is I 'kin hate people like this - they play the system and feck everybody else. I do hope there is some legal route you can take along the lines of telling the court they have illegally hidden assets. If not perhaps there are alternative ways of getting something back.

TooMany2cvs

29,008 posts

125 months

Wednesday 27th August 2014
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JustinP1 said:
Any advice chaps? Anything useful, and even just support will be much appreciated!
Put all the information you have, and any evidence, in front of the person handling the bankruptcy. Their job is to ensure that all assets are identified, then to ensure they're fairly divided amongst creditors.

Given that you're a creditor, you should already be in contact with them?

Red Devil

13,055 posts

207 months

Wednesday 27th August 2014
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Did you miss this bit?

JustinP1 said:
I wasn't contacted by the Official Receiver as I wasn't even noted as a creditor on the application that went before the court!

JustinP1

Original Poster:

13,330 posts

229 months

Wednesday 27th August 2014
quotequote all
TooMany2cvs said:
JustinP1 said:
Any advice chaps? Anything useful, and even just support will be much appreciated!
Put all the information you have, and any evidence, in front of the person handling the bankruptcy. Their job is to ensure that all assets are identified, then to ensure they're fairly divided amongst creditors.

Given that you're a creditor, you should already be in contact with them?
I did that this morning as soon as I found it online. Got passed through the system to the investigator in charge of the case. I think it may come down to how much of the above can be provable.

I thought I'd post on here, not only to update my old thread but to see if anyone has had any particular experience.

The other thing of course is whether I am advised, or even able to continue the County Court claim. The issue is that I shall be paying a £325 hearing fee, and turning up to a probably empty courtroom, thus incurring yet more costs that I may never recover.

motco

15,918 posts

245 months

Wednesday 27th August 2014
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Silly me! I thought this was a thread about Alex Salmond's Plan B...

getmecoat

TooMany2cvs

29,008 posts

125 months

Wednesday 27th August 2014
quotequote all
Red Devil said:
Did you miss this bit?
JustinP1 said:
I wasn't contacted by the Official Receiver as I wasn't even noted as a creditor on the application that went before the court!
rolleyes No, I assumed that he'd then gone on to contact the OR himself... as indeed he appears to have done...

JustinP1 said:
I think it may come down to how much of the above can be provable.
Well, of course. Otherwise it'd be REALLY easy to just dob the person who owes you money straight in it as a kind of revenge tactic.

But one thing's for certain - they won't take suggestions like this lying down, and they will make serious attempts to ascertain the truth. If it's that blatant, then it shouldn't be hard.

tenpenceshort

32,880 posts

216 months

Wednesday 27th August 2014
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Can you afford to sit on the 'debt'?

Bankruptcy typically lasts a year before discharge (lots of reasons this may be extended, though). Does bankruptcy wipe your exposure to claims post-discharge, based on debts accrued prior to it? I may be wrong, but my recollection is that it would not.

JustinP1

Original Poster:

13,330 posts

229 months

Wednesday 27th August 2014
quotequote all
tenpenceshort said:
Can you afford to sit on the 'debt'?

Bankruptcy typically lasts a year before discharge (lots of reasons this may be extended, though). Does bankruptcy wipe your exposure to claims post-discharge, based on debts accrued prior to it? I may be wrong, but my recollection is that it would not.
This is the issue. I can afford to sit on the debt, only because I may as well if I'm going to get nothing anyway. Thankfully, I've never been on either end on bankruptcy, so I don't know the rules.

I've found that you cannot start action against a bankrupt, however, thats not the case. I was frank with the first person I spoke with in the receiver's office, and he mentioned that as the 'debt' was incurred before the bankruptcy was entered into, then it would be included in the bankruptcy.

Whether that is the case for 100%, or whether I could restart action 12 months on are the variables at the moment.

tenpenceshort

32,880 posts

216 months

Wednesday 27th August 2014
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Has the previous judgment been set aside? Forgive me if I'm remembering it wrong, however is the debt not still in dispute?

Eleven

26,271 posts

221 months

Wednesday 27th August 2014
quotequote all
JustinP1 said:
tenpenceshort said:
Can you afford to sit on the 'debt'?

Bankruptcy typically lasts a year before discharge (lots of reasons this may be extended, though). Does bankruptcy wipe your exposure to claims post-discharge, based on debts accrued prior to it? I may be wrong, but my recollection is that it would not.
This is the issue. I can afford to sit on the debt, only because I may as well if I'm going to get nothing anyway. Thankfully, I've never been on either end on bankruptcy, so I don't know the rules.

I've found that you cannot start action against a bankrupt, however, thats not the case. I was frank with the first person I spoke with in the receiver's office, and he mentioned that as the 'debt' was incurred before the bankruptcy was entered into, then it would be included in the bankruptcy.

Whether that is the case for 100%, or whether I could restart action 12 months on are the variables at the moment.
As far as I am aware the only debts that are still live after bankruptcy are fines, student loans and the like. If creditors only needed to wait twelve months before having another stab there wouldn't be much point in going bankrupt.

tenpenceshort

32,880 posts

216 months

Wednesday 27th August 2014
quotequote all
Eleven said:
As far as I am aware the only debts that are still live after bankruptcy are fines, student loans and the like. If creditors only needed to wait twelve months before having another stab there wouldn't be much point in going bankrupt.
Is that what's happening here?

Genuine question; If a debt were disputed prior to bankruptcy (as opposed to the debtor simply being unable to pay), would that bankruptcy permanently remove the right of the claimant to have a court adjudicate on that debt post-bankruptcy? That would seem to give the bankrupt their cake and eat it, allowing them to avoid both actual and potential liabilities.

I thought bankruptcy was to deal with actual debts rather than potential ones.

JustinP1

Original Poster:

13,330 posts

229 months

Wednesday 27th August 2014
quotequote all
tenpenceshort said:
Has the previous judgment been set aside? Forgive me if I'm remembering it wrong, however is the debt not still in dispute?
Yep, still disputed and set aside despite the Deputy District Judge saying that the Defence was bunkum...

My appeal against setting aside is currectly waiting for the court to set a hearing date, and the trial date for the whole caboodle is six weeks away.

Eleven

26,271 posts

221 months

Wednesday 27th August 2014
quotequote all
tenpenceshort said:
Eleven said:
As far as I am aware the only debts that are still live after bankruptcy are fines, student loans and the like. If creditors only needed to wait twelve months before having another stab there wouldn't be much point in going bankrupt.
Is that what's happening here?

Genuine question; If a debt were disputed prior to bankruptcy (as opposed to the debtor simply being unable to pay), would that bankruptcy permanently remove the right of the claimant to have a court adjudicate on that debt? That would seem to give the bankrupt their cake and eat it, allowing them to avoid both actual and potential liabilities.
If the debt was disputed and the debtor subsequently went bankrupt, the debtor would have to have had had insufficient net worth to pay the other undisputed debts. So the disputed debt would just be another unpaid debt in insolvency.

That's just based upon common sense, not any in-depth knowledge of the subject.

tenpenceshort

32,880 posts

216 months

Wednesday 27th August 2014
quotequote all
A quick glance suggests potential liabilities (i.e. Justin's dispute) would be included as provable debts within a bankruptcy, the effect being Justin can whistle for his money if it's not in the estate's pot.

Could of course be entirely wrong.

Usual SP&L advice about anything remotely sensible (important); take some legal advice, as mistakes now can't easily be rowed back from.

Steffan

10,362 posts

227 months

Wednesday 27th August 2014
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I spent many years working on the Insolvency of others. I am a retired Chartered Accountant. I have seen all the tricks described on here and regrettably Bankruptcy can be manipulated by devious dishonest individuals. The majority of the replies thus far are pretty well on the button.

For the avoidance of doubt were I in your position I would consider carefully whether I wished to engage in seeking to collect a debt which is very likely to involve expenditure but very unlikely to produce much in return. The OR is overworked and understaffed. Whilst the OR will listen to all creditors including you unless you can prove beyond all doubt that fraud is occurring and the entire bankruptcy is a sham you have very little chance of actually achieving anything from this. I wish that were not the case but sadly I fear it is.

Some Bankrupts can and do evade and avoid debts very effectively. The burden of proof will be on you if you wish to take action. The OR is simply not staffed or funded to carry out serious enquiries. Bankruptcy in recent years has become a system that is designed to enable debts to be written off if the Bankrupt declares the debts and seeks the protection of the Courts. That phrase is critical in its structure. Bankruptcy is designed to allow individuals to begin again without the huge debts. This may seem unfair but it is actually how the legislation works.

As others have suggested if the Bankrupt fails to include debts even when these are substantial the chances are that the OR will add them to the declared debt unless massive sums and deliberate planed misrepresentation has been hidden deliberately by the bankrupt. If there are any specific questions I will try to be helpful in replies. But I honestly doubt that this is actually worth the candle.





Edited by Steffan on Wednesday 27th August 22:58

Martin4x4

6,506 posts

131 months

Wednesday 27th August 2014
quotequote all

A lot will depend on the examiner and how good they are and how busy the office is. Insolvency Examiners have a lot of powers if they choose to use them and they don't like people gaming their system. It clearly looks like that is the case here.

Therefore your best option is give them as much solid information as you possibly can. Things like the removal van, what was the date, what was the company. Any knowledge of assets that were disposed of. Cars (registrations from Photos) etc. The amount of assets that can be recovered will govern if you get any meaningful amount of what you are owed, because that is what will be shared out amongst the creditors. Hiding assets is a criminal offense and people do go to jail for this. Also making a false declaration to the court in the statement of affairs is perjury.


Edited by Martin4x4 on Thursday 28th August 00:00

PurpleMoonlight

22,362 posts

156 months

Thursday 28th August 2014
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If the OR is willing to include your debt then there seems little point in paying out more money for the court hearing. Even if you obtained judgement it would not make you a preferential creditor.

JustinP1

Original Poster:

13,330 posts

229 months

Thursday 28th August 2014
quotequote all
Steffan said:
If there are any specific questions I will try to be helpful in replies. But I honestly doubt that this is actually worth the candle.
Cheers Steffan, your advice is much appreciated.

I'd usually just pay for advice, and in most situations for large sums, I'd tell posters myself (as tenpence has!) that personal legal advice is best, however, I must decide where I must cut my losses.

To give some background, the couple bought a dilapidated manor house for the price of a car 20 years ago, then used grants to repair it, bought a 'title', and thought that it was OK just to call themselves Lord and Lady Surname. Over the years, save for a few weddings a year at the place, they've not worked and remortgaged for a seven figure sum.

The vanity even went to building a huge holiday home abroad, and a £100k RV to travel to it in. All of course with no income to fund it all.

They've done all right - their kids have been to private school, and they've lived like real Lords over the years, but that's been funded on other people's money, not only through debt, but simply not paying people for their goods and services. You'll always think a 'Lord' in a manor house will pay you right....?

On the other hand, on how it affects my family, even if I forget the claim amounts for not protecting the tenancy deposit, and even the amounts as a refund of rent for the half of the property we couldn't use as it could not be heated, and even if I forget the money we were scammed for a communal service pot that didn't exist, my family is still out of pocket our tenancy deposit and the huge electricity bill.

That's a total of £3000, alone with the £300 court fee. My choice now is a stark one, as the reality is I shall have to explain to my wife and daughter the things that we hoped to do but now cannot afford to do because of this. For that reason, I have no desire to throw even more money down a hole, as you have advised, as it just makes matters worse.


In terms of questions (and I thank you for your help in advance):

How can I 'prove' the debt? Will the Particulars of Claim with some documentary evidence be good enough?

Is it right that the 'debt' occurred pre-bankrupcy and could never be claimed again - tenpence's idea, stopping the claim, then claiming after discharge is out of the question?

JustinP1

Original Poster:

13,330 posts

229 months

Thursday 28th August 2014
quotequote all
PurpleMoonlight said:
If the OR is willing to include your debt then there seems little point in paying out more money for the court hearing. Even if you obtained judgement it would not make you a preferential creditor.
This is the most annoying thing about the Deputy District Judge that agreed to set judgment aside.

Part of my appeal was due to the lack of a reasonable Defence, the best she could have hoped for was a conditional order, and this is backed up by case law.

That means she would be allowed to mount a defence as long as she deposited the judgment amount with the court in 14 days. Then, I would have legally been a secured creditor. frown

Or, failing her lodging the money, I would have enforced the debt months ago.