Bankruptcy advice - someone else’s debt

[babydungarees]

Hi, hoping someone can help. My dad declared bankruptcy back in January & now the company instructed to claim back costs have contacted me regarding £5000 he gave me two years ago. This money was from my Great uncles estate and was my inheritance from him, but went through my dad as it came out of the sale of his house. The debt collectors want this money repaying as part of my dads bankruptcy.
It might not seem a huge sum, but I don’t have £5000, I am currently on maternity leave so on a very tight income & the small amount of savings I have are to support us through my unpaid months and pay my sons nursery fees. My husband is not a high earner & we cannot afford legal fees.

The advice from my parents solicitor is to ignore all letters from them, however today they have written to me stating they will start legal proceedings to recover the money if I don’t respond. I’m worried I could end up being taken to court and having a black mark on my credit file, which feels so unfair as this is not my debt and I have nothing to do with my dads bankruptcy or finances, and we want to be able to get a mortgage in the next 3-4 years.

Can anyone advise on what the appropriate course of action is? Do I respond / offer a payment plan? Am I legally obliged to pay the money back when I really cannot afford to? I will be seeking what free legal advice I can but this felt like a good place to start while I’m trying to get DS to nap.

Thanks in advance for anyone able to help.

You need to clarify if they are debt collectors or the insolvency person managing the bankruptcy.
Bankruptcy protects the debtor from collecting the debt so if it is a debt collector you do not have to pay and your dad needs to contact their insolvency advisor who will tell them to stop.
However if it is the insolvency advisor then you need to provide them with a paper trail showing this is an inheritance. They are able to claim back any money they think has been 'hidden' from them - I'm not saying this is what has happened but some people do this so they do need to chase up any money possible. Do not ignore them they are a government department not debt collectors you definitely need to speak to them for them to clarify

The other thing that they will need to know is whether this was genuinely an inheritance - from a will - or whether it was just that an estate was divided up informally by someone. An inheritance will have a paper trail that will show that the money was yours.

OK. Couple of questions.

Did your uncle leave you the £5k in his will? Or did your dad gift you £5k out of his share?

What was the precise date of the transfer of the £5k?

At the time of the transfer of the £5k was your dad insolvent?

Hi, thanks for taking the time to reply. I will call my dad to clarify whether the £5k was explicitly left to me in my uncles will or not as I am not 100% sure. The money was given to me in June 2018, my dad went bankrupt in January this year.

Apologies, to answer the other question it’s from a company called Begbies Trainor who are insolvency practitioners. I’m just confused why my parents lawyer has told us to ignore all communications from them & I really don’t want to do the wrong thing.

The advice from my parents solicitor

Which is your first problem. Appoint your own solicitor for advice - you really can't rely on someone else's solicitor.

If they are insolvency practitioners they are responsible for overseeing the bankruptcy. If your dad was insolvent at the time of his bankruptcy then they can claim the money back unless your uncle left it you in his will

It sounds like they are looking to treat this as a preferential payment - they can look back at any gifts / payments / sales to friends and family in the two years prior to bankruptcy.
As others have said it sounds like you need to get proof that this was a legitimate inheritance.
Also, although June 2018 was within the two year period, it was towards the beginning of it so it may be relevant if your father can demonstrate that he was solvent at the time.
I believe there may be options out there if they do continue to pursue you and you cannot afford to repay, such as a Debt Relief Order, but eligibility requirements apply.