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DH's ex went bankrupt in 2008, had a letter.

(56 Posts)
Fluffycloudland77 Sun 11-Nov-12 17:18:20

It says;

"You are scheduled as a creditor in this matter but you have not yet submitted a formal calim by completing proof of debt. If you do not submit your proof by 09.01.13 you will be excluded from the first and final dividend I am preparing to make".

To assist you in determining whether or not to submit a proof of debt, on present information there are estimated liabilities of £51,000 and the estimated amount available for distribution is £1200. I estimate that the rate of first and final divident will be 0.02p in the £.

If you do not submit a proof by 09.01.13 and there remains a surplus after the claims of all provved creditors have been satisfed, I will pay statutory interest to the proved crditors. Should there still be a surplus after the payment of interst the remaining funds will be returned to XXX."

We have an aggreement with her and she has been paying monthly for years, does this letter mean she is no longer obligated to pay us? she went bankrupt after we took her to small claims court and had a CCJ against her. She has something of DH's so we said this money is a condtional sale and as we had all the paperwork she signed at the time the insolvancy service said either pay him or give him the item back. She wrote to us and said she would carry on paying.

What do we do? I have all the relevant paperwork from county court etc.

Our main worry is that her bankruptcy is about to end and she will not be obligated to pay us and DH will lose out then.

LFCisTarkaDahl Sun 11-Nov-12 17:20:25

Yes, she doesn't have to pay. All of her assists are divided between all creditors.

You are being offered the chance to claim from that - your share will be small.

Fluffycloudland77 Sun 11-Nov-12 17:25:37

Even though the item was not in the bankruptcy?

We only got her to pay for the past 4 years as it was a conditional sale and therefore if she didnt pay we could have that back. The insolvancy said this item wasnt included in the bankruptcy as technically it didnt belong to her.

Very sad.

LFCisTarkaDahl Sun 11-Nov-12 17:31:08

By insolvency though you mean an arrangement BEFORE the bankruptcy like an Iva?

If so and that has then failed because of her other debts and she has now gone bankrupt then it means that all assets are divided between creditors now.

You need to write to the IRO and tell them the item is NOT hers to be included in the bankruptcy.

Fluffycloudland77 Sun 11-Nov-12 17:38:46

Sorry, I've had 8 years of this and it makes my head hurt to be very honest with you, no wine in the house either.

She took the item in 2005. DH said have it but sign a contract, she made up the contract and they both signed. Then he met me and I kept the contract thinking she wouldnt pay when the house was sold. She didnt.

After the big court case splitting their assets we took her to small claims where the judge found in our favour and said she cant appeal. This was 2007.

She paid for a while then went bankrupt without telling us but I was checking the online register almost daily by then so we found out. She stopped paying for 2 months.

After we spoke to her insolvency practitioner it was aggreed that this was a conditonal sale, she had the item on the condition she paid regulary. Therefore it wasnt included in her bankruptcy.

She wrote to us saying her insolvency service had "allowed" her to carry on paying us and she has done monthly since then.

I am very gratefull for any advice, I'm so tired of talking about this with DH.

Popumpkin Sun 11-Nov-12 17:39:30

Do the IRO know about "the item" or does she owe more money to your DH on a totally different matter?

I may have missed the point, but it sounds to me as if she is purchasing "the item" from your DH in effect? If that is the case then I am confused as when an individual is made bankrupt I was under the impression that all hire-purchase agreements and the like had to end immediately and the goods be either sold or returned if the bankrupt person has no equity in them (e.g. if the balance of the finance is higher than the value of the item).

Lougle Sun 11-Nov-12 17:41:07

I don't know quite how to phrase this, but she has been breaking the law by paying you and if the official receiver finds out she could get into significant trouble.

Popumpkin Sun 11-Nov-12 17:42:07

Sorry, x-posts. I'm not sure I can be much help, as that goes against what I thought I knew about bankruptcy.

Does she still owe your DH much money? Is it going to be a big loss to you financially if she gets to keep the item & pay nothing further for it?

Fluffycloudland77 Sun 11-Nov-12 17:46:41

They know about the item. I found out about conditional sales (I know I spelt that wrong but I'm too stressed to think) and when DH wrote to the insolv people they aggreed he owned the item until she payed for it.

They said he was welcome to take his item but the police wouldnt help us recover it and we hit a brick wall. So she pays.

NatashaBee Sun 11-Nov-12 17:47:56

It sounds like the 'item' should have been declared as an asset at the start of her bankruptcy and turned over to the OR. You are not allowed to keep cars on hire purchase etc and are not supposed to enter into any kind of credit agreement. Mind you from the fact that the OR wrote to you, I assume that you were listed as a creditor on the original forms. I'm curious as to what the item might be that they've allowed her to keep it and keep paying for it.

Fluffycloudland77 Sun 11-Nov-12 17:52:14

I think she owes about another £1000 on it, money dh cant afford to lose really they cut his hours at work.

As she still has it he will want to go back to small claims court, he will never give up.

Popumpkin Sun 11-Nov-12 18:37:02

Could the item be sold? It would depend on what the item actually is maybe. I'm really surprised that the item has not had to be sold before now so that her equity in it can go in her "pot" for her creditors. Was it deemed essential maybe so an exception was made? Is the item her home or a car she needs for work etc.?

I think you & your DH should take some proper advice on this (CAB maybe?) but if you have it in writing that the item belongs to your DH then surely that must count for something. Maybe your DH would be better off if the IRO forced the item to be sold?

Fluffycloudland77 Sun 11-Nov-12 18:39:18

Yes it could be sold but it's a matter of pride and she wont sell.

The police say it is a civil matter.

The small claims do not want to know while her bankruptcy is in place. angry

We cant hire bailiffs to reposess it as it is not a business debt.

No one wants to help us. sad

Popumpkin Sun 11-Nov-12 18:48:23

Oh dear sad. Your DH could ask the IRO why the sale has not been forced as, after all the payments she has made, it must now be considered an asset of hers?

Although, thinking about it more carefully, maybe that would only apply it it could be considered her asset on the date she was declared bankrupt. I'm amazed there is no way of your DH getting his property back or forcing a sale - hopefully someone legal will come along & advise on that.

Ideally speaking, what would you like to happen? Get the item back or sell it?

Fluffycloudland77 Sun 11-Nov-12 18:50:55

Thats true, if she has an asset and she stops paying us then it's hers and could be sold to pay for her creditors. I just dont know.

We just want the money, she can keep the item.

Leithlurker Sun 11-Nov-12 19:11:51

Lets get this in order so we can sort it out.

DH an ex split up, part of divorce proceedings was that this "thing" would be bought by the ex off your Dh paying a monthly amount which apart from 2 (?) payments she has kept up with.

This arrangement was before she declared bankruptcy and when she did the insovancy practitioner allowed her to keep up the payments which again she has?

You said that you forced her to declare bankrupcy, was it over this item< or other debts she owed to your DH?

The insolvancy periode is now about to end which is as expected and again as expected once the decree has expred all her debts will be void including any to your DH. Has she made any noises about paying for this item after the end of the insolvancy? If you say she has a lot emotionaly invested in this thing she may have every intention to keep paying. It certainly seems strange indeed to talk her practitioner in to keeping paying for it which deprives other creditors of money over the last three years, in order to screw your DH now?

If she does stop paying for the item as some long term FU to your DH then I might have been more wary about forcing her in to insolvency in the first place, or breaking the contract for the thing handed all her money back and claiming legal ownership back. You can still do this but she will be in her rights to expect all her money back. She was not renting it but buying it. The contract it's self might be worth looking at but that could work against you as in if it was drawn up badly she may be able to dispute ownership. Long road short you pay sheds more money on legal bills to recover it, walk away and live a less stressful life, or she pays the money as she promised as she always has because she wants to OWN the thing.

Fluffycloudland77 Sun 11-Nov-12 19:17:42

We didnt force bankruptcy, she took £25,000 out in cash and home improvements on her mothers and dp's house on cc and loans then went bankrupt. She had already spent £25,000 on cards doing their house up unknown to dh. Then she had £50,000 from the sale of that house and took it all out in cash and said she had no money.

The insolvancy people led us to believe that because it was a conditional sale it was outside their remit and they couldnt touch it, they said we could have it back but short of breaking into her house we have no way of taking it.

Leithlurker Sun 11-Nov-12 19:35:14

"she went bankrupt after we took her to small claims court and had a CCJ against her." Is what you said in your OP. I would infer from that, she was advised to go bankrupt as with the ccj, and the small claims against her she would be expecting any one of her creditors to force her in to bankruptcy, in other words jump before your pushed. Your small claims could well have been the thing that made bankruptcy inevitable.

Her practitioners are their to act on her creditors behalf as well as hers, the point of insolvancy is not to get off scot free, she will have had to agree to and keep to a rigid budget and liquidate any assets to pay to the creditors, from what you say the amounts owed to others would have been much more than owed to you and that means your way down on the list of people. This is reflected in the 2p in the pound offered. The problem here is that you should have cancelled the payment plan, or refused to take her money, or banked all the payments in to a separate account that was untouched so you could give her all the money back. The contract is being operated as was intended by her, she pays and ends up owning the thing. If she stops paying at the end of the insolvency you will have to enforce the contract through law which will be costly and time consuming as I imagine she will muddy the waters significantly, in the end the money she owes might well be spent by you on legal fees.

On the upside you still cannot be sure she does intend to stop paying.

izzywizzyisbizzy Sun 11-Nov-12 19:38:28

So is all this about £1000, its not nice, but its not worth the grief - count yourself lucky it has come down to that little really.

Fluffycloudland77 Sun 11-Nov-12 19:47:09

She thought if she went bankrupt then we wouldnt get the money.

She had £50,000 off the house sale so she would have had enought to clear her debts and pay dh out of her earnings.

She missed the two payments while I was researching conditonal sales and sorting it out with her ip. When they said dh could have it back she payed the two payments together and said she would carry on paying.

Her bankruptcy was in an august, will it run to next august?.

I dont understand why we ought to have kept the money and be giving in back to her?

Shes bought another house in the meantime.

Fluffycloudland77 Sun 11-Nov-12 19:50:02

We get free legal stuff, we have a barrister in the family so fees dont concern me it's only small claims fees we'd have to pay.

We call her teflon tina. The courts know she took all the cash out and "spent" it but still let her go bankrupt. Theres card payments going out to double glazing companies and plumbing merchants. Why would someone living with their parents be buying doubleglazing and bathrooms? £6000 in one transaction.

Did she tell you that she went bankrupt because she didn't want you to get the money? Its a huge sacrifice to make to your life just to prevent somebody getting something... confused

I think it may be wise putting your concerns in writing to the OR and asking for their official response on the matter..

Leithlurker Sun 11-Nov-12 19:55:50

Look I am not saying she is a nice person, or that in some ways she has played the system. I am saying that she has been helped by the rules. If she had the money to buy the house as you say that would have been found, the ip does not just take her word for it. That is not to say the money could have been hidden or transferred to someone else. This though would be fraud and should be reported to the police and her ip.

I was under the impression that it was a three year period, however it may be newer form of iva than I am used to. She is banned from any credit, any type of ownership of or control of a company, and some jobs are barred to her. If you have any evidence she has broken her IVA contact the IP and the police. In the main I agree with Izzy, now might be a good time to go your own way from this woman despite it being a loss.

Fluffycloudland77 Sun 11-Nov-12 20:08:25

We won't go spending loads of money on it. Our relative will advise we don't too and the anger is fading...she once told dh he could swivel for the money so we have more than she planned to pay.

She has played the system though.

FoxtrotFoxtrotSierra Sun 11-Nov-12 20:28:28

If she was made bankrupt in August it will run until next August (you are right on that point) but if she has been found to be culpable or dishonest the OR may request a BRO which continues the restrictions in bankruptcy for a certain period beyond her discharge.

The letter from the IP is fairly standard. As a creditor of your DH's ex you have a right to claim against her assets in bankruptcy. Claiming the 2p in the £ doesn't put you at either an advantage or disadvantage from where you are - its just the IP's work in administering her bankruptcy. That she paid you before or since is neither here nor there - what she does with her cash, beyond any income payments order, is her business now.

Have you told the Official Receiver or Insolvency Practitioner in charge of her case about the money she got from the house sale? Her concealing this could be grounds for a BRO or even a prosecution.

As for your initial question - she was no longer obligated to pay you from the date of the bankruptcy order, unless you had a charge on the property (like a mortgage or similar) that she had of your husband. That she has continued since muddies the water, but she doesn't have an obligation unless there is legal paperwork in place as to what has gone one.

I would put in the proof of debt. She won't know it has gone in, and therefore you're more likely to get the money she owes you in full. If you want to PM me please do as this is my area of expertise - I may be able to help further.

DesertHippy Mon 12-Nov-12 04:37:39

Post over on the Bankruptcy board on MSE. There are several people who work/ed for the Insolvency Service, a couple of CAB advisors, a National Debtline advisor and some very knowledgable people who post on thta board.

DesertHippy Mon 12-Nov-12 04:44:42

If she was made bankrupt in 2008 as in the title Foxtrot then she would have already been discharged and so cannot get a BRO/U unless it was in place before she was discharged.

Fluffy please can you confirm when she went bankrupt and definitly post on the MSE board I linked to.

FoxtrotFoxtrotSierra Mon 12-Nov-12 07:18:00

You're right Desert. I just saw the post from the OP and assumed she meant this August. That'll teach me for posting after Sunday lunch...

I still think you should put the proof of debt in as asked by the trustee OP.

RedHelenB Mon 12-Nov-12 07:38:19

Leave it. You can't take the item back and keep the money & for the sake of 1000 pounds it really isn't worth the aggro - how much has she paid you?

Fluffycloudland77 Mon 12-Nov-12 08:12:21

Yes, the reciever know about the sale of house money. She told them she spent it and that was that.

It will be with her mother. They are more than capable of hiding money for 5 years.

She went B in August 2008, if she continues to pay until next August then we will only be £500 short.

I just feel so sorry for DH, his hours at work have been cut and he is finding it tough at the moment without this.

DesertHippy Mon 12-Nov-12 08:23:10

If she was given an IPA then that will only last 36 payments. Please post on the board I linked to (just sign up, press the new thread button on the board and start posting) and see what they have to say.

Fluffycloudland77 Mon 12-Nov-12 08:30:20


I will go on MSE later.

Lougle Mon 12-Nov-12 10:14:26

I wonder if you're getting confused. If she declared bankruptcy in 2008, then she was discharged at the latest, in 2009. There may be an Income Payment Agreement (IPA), which runs for 3 years, but that is independent of her bankruptcy status.

Fluffycloudland77 Mon 12-Nov-12 12:35:04

It says it's a first and final dividend.

IPA isnt on the paperwork anywhere.

keli5325 Mon 12-Nov-12 12:55:31

If you say she owes another £1000 and the claim will pay out £1200, why not just submit the claim and get your dividend cheque and put it behind you?

Fluffycloudland77 Mon 12-Nov-12 13:05:11

We will, I just need to know when she is stopping paying, if she is able to stop paying and if it's above board.

Although anything above board will be a novelty to her.

Lougle Mon 12-Nov-12 13:09:28

keli5325 the claim will pay out £1200 in total, against liabilities of £51,000.

That means that if Fluffycloudland77 puts in a proof of debt of £1000 and asks for payment, she is likely to receive a total of £20.

Fluffycloudland77 Mon 12-Nov-12 13:13:23

I dont know how she got that much credit with no mortgage and a £175 a week wage.

keli5325 Mon 12-Nov-12 14:39:23

I read it as total debts of £51k?? not £51k owed to the OP?

keli5325 Mon 12-Nov-12 14:43:13

Regardless of if you submit a claim or not, once the bankruptcy is complete and the dividends distributed your debt will be written off in the bankruptcy and she can stop making payments to you

Fluffycloudland77 Mon 12-Nov-12 14:53:28

Yes, total debts of £51,000. DH isnt owed £51,000.

If the BR runs until next year then she may well pay until then.

And I may well write to the cc she owes money to and tell them she has a £4000 asset, two months before it all expires.

But I probably wont as these things come back on you, unless you are teflon tina.

keli5325 Mon 12-Nov-12 15:02:50

If she went bankrupt is 2008, she may have been discharged in 2009 but any IPA would run for 3years and any assets realised within 3yrs.

Have you checked her on the insolvency register??

If they are due to distribute dividends the bankruptcy estate is concluded once all claims are recieved and paid.

The creditors will have written off the accounts and probably really wouldnt be able to do anything about a £4000 asset. Given that you said the asset was excluded from the bankruptcy on the grounds that it wasnt hers, the OR/Trustee probably wouldnt be worried about this either.

Have you spoken to the OR about this asset?

Fluffycloudland77 Mon 12-Nov-12 15:07:55

DH has to ring them.

keli5325 Mon 12-Nov-12 15:12:34

As she has been making payments and doesnt really need to this leads me to believe that she doesnt understand that the debt has been written off in the bankrutcy.

Best case scenario is that she continues to make payments to you.

Fluffycloudland77 Mon 12-Nov-12 16:15:11

Well I've found the letter off the insolv people saying they are not going to contest the issue and that if she doesnt want to carry on with the conditional sale we can have the item back.

It's all very odd isnt it?

Lougle Mon 12-Nov-12 20:55:55

Well that clarifies it then. Your DH's ex had the choice to either continue to pay the money, or allow you to reclaim the item. You can't do both. So, if she doesn't continue to pay you the money, then you can have the item back. You need some proper advice, I think.

Fluffycloudland77 Mon 12-Nov-12 20:57:49

I know, I literally cant think clearly about it and research it this time.

RedHelenB Tue 13-Nov-12 07:40:25

I'm confused over how her ex can claim from the bankruptcy estate if she has been paying for the item all along. have you got 3000 pounds to pay her for the item if she does stop paying & you want it back?

Leithlurker Tue 13-Nov-12 08:57:52

That was my thought to helen, as I read it this is an informal higher purchase. So at the end of the term the item becomes hers. If the contract is broken by Fluffy's DH then she (the ex) will be entitled to recompense. May not be the full amount she has paid but it sounds like she would flippin well seek court action to recover her money.

Fluffycloudland77 Tue 13-Nov-12 09:23:12

How would we break the contract?

CajaDeLaMemoria Tue 13-Nov-12 09:28:51

I'm not sure that that is the case, though.

My legal training is thin on the ground (2nd year) so I could very well be wrong - but I'd love to learn why if I am!

If you get a car get a Ford on hire purchase (for example), pay for 2 years and then stop, Ford can retrieve the car. You are not entitled to the money back - it's classed as rent for the period that you had the car, and covers the difference between what Ford could originally have sold the car at, and what they can now sell the car at.

So in this case, the ex had the option of handing the asset back and not being contract to any further payments, or carrying on paying to own the item at the end. So if she stops paying, why would DH have to pay back the money? If it's an informal hire purchase, wouldn't the money go towards the hire - because she hasn't yet paid enough to buy the item.

Apologies if I've got this all wrong - it's early and I've got the flu - but I'm trying!

Fluffycloudland77 Tue 13-Nov-12 09:37:51

My head hurts.

I'm no good at this stuff. Ask me one on saving money or meal planning or cat care.

Journey Tue 13-Nov-12 10:53:39

If small claims aren't interested then you need to include your item with the bankruptcy people. It will be included as one of her expenses and will will be listed along side her other creditors. The creditors will then decide if they agree with the bankruptcy agreement and payments. The biggest creditors will get the final say. As someone said earlier you will probably only get £20.

Your item (whatever it is) could be viewed as an asset. If it is sold the cash would be put in the pot to be distributed fairly to all the creditors. Cars bought on loans for instance don't automatically go back to the sellers. The car just becomes a source of money if it is sold to pay back ALL the creditors in a 'fair' distribution.

Whether you like it or not what your DH ex spent the money on is irrelevant.

I think you should accept the money is gone even although it is annoying and unfair. She is bankrupt after all so technically she has no money to pay you.

keli5325 Tue 13-Nov-12 11:16:56

The creditors have nothing to do the administation of the bankrupts estate, it is the job of the official receiver or the Trustee in bankruptcy.

If the ex has been allowed to retain the item it has been excluded from the bankrupt estate probably because she could not prove it was hers and therefore not her asset in her bankruptcy.

The OR would not allow an "informal HP agreement" in the exs expenditure as ths could be classed as preferring a creditor, especially as the OP is classed as a creditor as she has had a claim form to prove the debt.

What item are we talking about, this may help with the advice?

whether you agree with the official receiver or not is irrelvant, you either make a claim or initiate proceedings for recovery of the item.

You are getting some very confusing and inaccurate advice on here

Lougle Tue 13-Nov-12 11:33:07

Why won't you tell us what the item is? It's so abstract it's impossible to help.

Leithlurker Wed 14-Nov-12 09:14:53

Normaly getting a car on HP (or any other type of goods) will not result in the supplier of the thing wanting it back. So I agree with your thought process caja.

However this is a diffrent kettle of fish, and to answer your question fluffy, you would break the contract by informing the ex that you no longer want her to have the thing and that she should return it and stop making payments, in other words you would reclaim what is still your DH's property. This is a diversion though and fluffy I have many questiones about cat care.

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