Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By Butts
#212847 I see a lot of mention on here about Property etc in Bankruptcy.

What happens to Pensions - am I correct in assuming that the OR can have an interest in future entitlements (lump sums etc) or do they have no claim on any future pension which would presumeably become payable after discharge.

Anyone know the score on Pensions and Bankruptcy :mrgreen:
By Iphigenia
#212858 Provided it's a government recognized pension scheme, and they mostly are:

Pension contributions are an allowable expense on your i and e - but not AVC top-ups. Reasonable amounts.

While your lump sum sits there, it is not open to the OR.
If you choose to draw any of it now as income, then it is just income, and has to be included on the i and e.
By Butts
#212859 Hi iphigenia,

I read somewhere (national insolvency helpline - I think) that the OR will ask for a list of Pensions etc and can "arrest" money in the future when it becomes payable even though you may be long discharged.

ie they see you are going to get a lump sum of say 25k on retirement plus a pension - and they can grab future benefits when they become payable- ie you defer the payment till you get the cash but it is included in your assets at time of Bankruptcy :mrgreen:
By Iphigenia
#212864 :O
I hope not! I was told not by the OR/IS at the time of my bankruptcy, so I await further posts on this with interest!!
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By TalbotWoods
#212866 Normally the answer is no, the OR has no interest nor can he touch any future payouts.

The main exceptions being:

If the pension scheme is not recognised by HMRC as a pension scheme (These are few and far between nowadays).

or

Prior to bankruptcy you had made very large lump sum payments in to the scheme (the OR can see this as trying to make assets unavailable), but they normally only look at these if this has occured in the year before bankruptcy, when you knew or had resonable beleive that you were insolvent. This again normally only applies to AVCs.

Moving on, the OR will ask for detials of your pension schemes as he needs to verify that they are recognised schemes, if they are then normally that is the end of the matter. If not then the OR will be very interested!!

Tim
By Butts
#212883 Thanks for the input all of you :mrgreen: