Author Topic: Bankruptcy Questions  (Read 16112 times)


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Bankruptcy Questions
« on: Jun 20, 2014, 12:03:37 PM »

I am currently in the process of completing forms 6.27 and 6.28 ready to file for bankruptcy having confirmed with the CAB that I have no other choice in my current circumstances.

I have three issues and I hope someone here can help...

1. Two years ago I "bought" my Dad's then house for £1 to allow him to move into sheltered accomodation on the explicit understanding that when it was sold on the open market later on the full market value would pass to my father (ie I had no "beneficial interest"). Since then I have encountered significant changes in my own circumstances and transfered the house to my brother for £0 on the same basis - that once it has sold on the open market the full value passes directly to my father. Now this was all done informally as it was in the family - there was no deed of trust. Will the OR wish to restore the house to me from my brother and sell it to pay into my bankruptcy? (Since the transfer to my brother the house has actually partially collapsed and currently has no realisable value on the open market.  Though he is in the process of selling the property to a developer for around £11k.)

2. As things stand I have not been able to run my car for some time and have transferred the ownership of it to my partner on the understanding that if he pays the running costs I will use it to teach him to drive. For his part my partner paid all my moving costs and is paying all the household expenses. Not only that he has paid out significant running and repair costs. As the transfer was made not for ready cash is the OR likely to want to reverse this and sell the car? Even though it's value is less that the "consideration" given by my partner in return?

3. I am struggling with two areas of form 6.28. Firstly what assets to I have to explicitly list? The guidance says everything (including bedding and clothing etc) but really do I need to count my pairs of socks? Or is it only items of any "significant" value? I have very few assets, even my computer I bought for £85 8 years ago - so I'm not sure it will be worth anything on resale now. Lastly, in the household expenses section (7.1), I make no contribution to anything following the agreement with my partner about the car. Do I simply put £0 in all the boxes and expand on the last page?

Apologies if there are obvious answers to any of these things, I've been going round in circles for about 6 months now trying to get everything together for bankruptcy and maybe I'm no longer seeing the obvious.

Many thanks in advance for your help.


Richard Stockburn

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Re: Bankruptcy Questions
« Reply #1 on: Sep 30, 2014, 04:36:17 PM »
Hi Gavin

My name is Richard Stockburn and I work for as an insolvency specialist.

1) You are obliged to provide details of all property transfers or properties in which you might have had an interest, in the previous five years. If the property in question is mortgage free, it will definitely attract the attention of the Official Receiver regardless of you acting in the best interests of your Father. The reason for this is that it is the OR's duty to realise all assets with a view to passing on the funds to the creditors.
I therefore feel that the OR will investigate the circumstances surrounding the property transfers, mainly because you sold a property at less than its true value - see question 3.5 on the Statement of Affairs or form 6.28. It is debatable as to whether the OR would seek to transfer the property back into your name as it appears there is very little value in it, but you would need to come clean about the property transfers.

2) Here again, there is the sale or transfer of an asset at undervalue - which needs to be declared - and despite the fact that your partner has probably paid twice over for the car in other ways, there will still be some explaining to do. The reason for this is so many people try to hide assets by transferring them to others. Still, with a value of less than £1000, I wouldn't expect too much drama.

3) Clothing and household furniture - including the inexpensive computer - need not be listed. Simply enter values of '0' for these.

Give me or Sean a call if you feel like a chat on 07894 481175 or 01425 600129