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

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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.

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.

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 .

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.

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.

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).

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.

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?

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.

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.

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?

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.

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

No one wants to help us.

Oh dear . 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?

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.

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.

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.

"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.

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.

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.

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...

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

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.

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.

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.

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.