Bankruptcy fraud???

[Mani1111]

Hoping some one can advise me

my mother has got in to a few debt problems, but no court threats as yet...
the problem is that couple of years ago after recieving bad news about her health she transfered a property that was mortgage free into the name of her children thinking she was doing the right thing by usand uncomplicating matters..two years on she is alive and well and in good health but we have just discovered that her actions could potentially be bankruptcy fraud. Gifting the property away..apparantly if her debts go to bankruptcy the reciever will look 5 years into the past and could potentially be jailed and large fine...we are stumped.. She couldnt foresee a bankruptcy....


question is should she arrange a payment plan with creditors to fend off any impending bankruptcy....she is a pensioner on pension credit..
thanks in advance for any advice

[nemesis45]

Re: Bankruptcy fraud???

Hoping some one can advise me

my mother has got in to a few debt problems, but no court threats as yet...
the problem is that couple of years ago after recieving bad news about her health she transfered a property that was mortgage free into the name of her children thinking she was doing the right thing by usand uncomplicating matters..two years on she is alive and well and in good health but we have just discovered that her actions could potentially be bankruptcy fraud. Gifting the property away..apparantly if her debts go to bankruptcy the reciever will look 5 years into the past and could potentially be jailed and large fine...we are stumped.. She couldnt foresee a bankruptcy....


question is should she arrange a payment plan with creditors to fend off any impending bankruptcy....she is a pensioner on pension credit..
thanks in advance for any advice

Good morning,

Lets' slow down a bit here, yours mothers debts I presume are all unsecured?
Please give us some information on each debt.
1. Name of original creditor.
2. If the debt has been sold who to?
3. The amount (s) outstanding

4. The total overall?

nem

[Mani1111]

Re: Bankruptcy fraud???

Morning

they are hsbc credit card sold to pra group. 8000
Loan sold to cabot 14000
bcard. Still with them for 12000
getting letters from them apart from barclaycard. No threat of banruptcy but if it does happen then the consequences seem very serious

cheers

[R0b]

Re: Bankruptcy fraud???

Hoping some one can advise me

we have just discovered that her actions could potentially be bankruptcy fraud.

Who told you that?! it's only fraud if you are deliberately concealing assets and then yes you could be in trouble. Otherwise the receiver can only have the power to set aside a transaction if the person was insolvent at the time of the transaction or became insolvent as a result of the transaction.

There may be other options than bankruptcy so as nemesis said, some further information would be useful.

[Mani1111]

Re: Bankruptcy fraud???

hi
its from cab and gov.uk....the offence listed is vague ...listed as giving away property at undervalue in previous 5 years..which is effectively what happened here... They could see that as fraudulant or planning for the future??

[Mani1111]

Re: Bankruptcy fraud???

Insolvency act bankruptcy offences section 357"bankrupt transfers any property or makes a gift at any time Within 5years prior to the bankruptcy petition". 2 years prison £2000 fin

[Mani1111]

Re: Bankruptcy fraud???

And so it seems to say you dont have to be bankrupt. Its prior to the petition. How can one see a bankruptcy in the future?

[R0b]

Re: Bankruptcy fraud???

As i said, they would have to prove that the transaction was deliberately sold to avoid paying off the creditors and thus a fraudulent transaction. The fact that she was in serious ill health could be an argument to rebut any presumption and I would imagine that if she is made bankrupt, then as long as she assists and explains that the property was sold a few years ago it is unlikely she will get a prison sentence. Those offences are usually reserved for people who deliberately attempt to avoid creditors.

Has she considered an Individual voluntary Arrangement?

[Mani1111]

Re: Bankruptcy fraud???

No. Not sure what that is. Will have to look into it...but as it stands nothing has happened as yet...just not sure if to take that risk and just make small payments to pre emt that risk as the section also list possible defences such as "innocent intentions". But defence is listed for section 357

- - - Updated - - -

Sorry. I meant NO DEFENCE FOR SECTION 357

[Nibbler]

Re: Bankruptcy fraud???

This applies to that though....

352 Defence of innocent intention.

Where in the case of an offence under any provision of this Chapter it is stated that this section applies, a person is not guilty of the offence if he proves that, at the time of the conduct constituting the offence, he had no intent to defraud or to conceal the state of his affairs

Unless it is done with deliberate intention to put the property outside any anticipated bankruptcy, then there will be no offence to answer.

Regardless it could still be looked at as a "transaction at undervalue" by the OR/trustee and potentially reversed, subject to some conditions.

https://www.insolvencydirect.bis.gov...3/Part%203.htm

So far as bankruptcies are concerned, if the transaction is more than two years prior to the presentation of the petition, it is necessary to show that the debtor was insolvent at the time of the transaction (see paragraph 31.4A.109), or became insolvent as a consequence of the transaction [note 20]. Evidence in support of this would be documents such as accounts and accounting information, demands for payment from creditors or Crown departments or increasing overdrafts on bank accounts.

Where the beneficiary of the transaction is a connected party (see paragraph 31.4A.110) or an associate (see paragraph 31.4A.111), insolvency is presumed, unless the contrary can be shown [note 21] [note 22].
In other words, where the beneficiary of the transaction is a connected party or an associate, the onus is on the insolvent (or the beneficiary) to show that they (the insolvent) were not insolvent at the time of the transaction.

A relative is an "associate" under the definitions of the Act, so the onus may lie on her to show that she was not insolvent at the time of the property transfer.

[Nibbler]

Re: Bankruptcy fraud???

Sorry. I meant NO DEFENCE FOR SECTION 357

I would stop worrying about s357 and any criminal "offence". Not going to happen.


Possible that any OR/trustee could look at the possibility of trying to reverse the transfer via the civil courts, but even then that can be difficult for them and is not criminal proceedings.

[Mani1111]

Re: Bankruptcy fraud???

Thanks for that link Nibbler..that cleared things up slightly . The transfer took place while all payments were good and before even that big loan was taken out...but there seems to be other stipulations so we do need to worry about section 357. The question for us kids is if we want to put an old woman through all that s**t

[Nibbler]

Re: Bankruptcy fraud???

From what you have posted you have no need to worry about s357.

As said, a civil order under s339/342 may be a possibility, but that is not criminal.

That is if bankruptcy ever came to pass, which honestly is highly unlikely, unless she opts for it herself.

[Mani1111]

Re: Bankruptcy fraud???

I take your advice Nibbler and would follow it myself... But need to consider a pensioner with illness...as to bankruptcy coming to pass...i do doubt it too..but you read many scare stories on these sites (aswell as positive ones of course). And it seems you only get 21 days to react and i dont live with her so being such a short amount of time i might miss the deadline...

[Mani1111]

Re: Bankruptcy fraud???

I think my plan would be to offer the three nominal payments. Say a fiver a month.....possibly drag it out for the remaining 3 years of the 5 years ( would amount to about 600 only...or possibly make them a silly offer of final sttlement in about a year..what do you think?