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

Moderators: TalbotWoods, JaneClack

By Brian
#3336 My situation is fairly drastic and need some practical advice.

Currently have CC, O/Draft and Personal Loan (All unsecured) totalling 70K. This has amassed primarily through debt consolidation over the years, increase in family, and share dealing. At a particularly difficult time during the last few years, a family member stumped up some cash for me to meet some trading positions in my shares. Hoping that in time the situation would improve I would be able to repay both them and my creditors. Unfortunately this hasn't occurred. I can no longer meet payments in full to my creditors. If I sell the balance of my shares, then I will still owe the family member the balance plus all of my other creditors in full.
If I sold the shares and reimbursed him as much as I receive, even though it wouldn't be the full balance, and then declared B, would the OR have the right to reclaim the monies paid back, even if he was listed as a creditor in the bankruptcy process. I don't think it counts as a preference as he is not gaining from any dealings I have made.
The only other assets I have are a car worth approx £5000.00. Would this have to be sold as I would still need a car as we live in a rural area with an extremely poor public transport system.

My Job dictates that I don't really want to pursue the Big B, would probably be happier with an IVA or DMP. DMP unfortunately would take close to 20 years to repay on my disposable income.

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By JaneClack
#3384 Have only just noticed this post so apologise for the delay in any reply.

Unfortunately if you were to pay the family member back you would be showing a preference and as such the Official Receiver could overturn the transaction. I understand how you feel morally about this as it is a member of the family but it would be better to include this - what you do when you are discharged from bankruptcy is up to you.

The car itself is of quite a high value and the OR might well want it sold and give you some money back to purchase a cheaper car as you would need it for work. However, he may also allow you to pay a sum in order to retain it - this would obviously have to come from another family member.

An IVA may be a sensible option for you but you would need a lump sum or surplus income to service it for 5 years. Contact NDL or FCL/Payplan who would be able to give you free advice on this.