I lent my brother £2000.
He got out a loan specifically to repay his debts, and he paid me back.
5 months later he went bankrupt.
one year later I recieved a letter saying that I must pay back the £2000 to the banckrupcy reciever as by paying me back within 6 months prior of going banckrupt it showed a preference payment and that the £2000 must be given back to the loan company.
I have 7 days to pay it back or they start court proceedings.
1. I don’t see how a loan company can lend someone money on the understanding it is to get rid of someones debts and then I who have nothing to do with the loan have to pay it back.
2.If they are legally entitled to my money, is there not a time limit between how long the banckrupcy people have to request the money back from me. As it is taken them a year to ak for the money back and i no longer have it.
uk bankrupcy law: I lent brother money, he paid me back, went bankrupt, now i have to pay it back?
March 9th, 2010 by admin Leave a reply »
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The two of you may be guilty of conspiracy to defraud, in any country. Did you spend it all at the track?
Paul C is just venting. Must be having a bad day….or maybe he’s American.
That being said….
Yes they are entitled to take the money. Albeit a noble gesture, what your brother did is considered a “fraudulent preference” in as much as he favored you at the expense of the other creditors.
You will then file a proof of claim with the trustee and be pro rated along with the rest of the unsecured creditors.
Once your brother is discharged, there is nothing preventing him from settling the account with you. Usually in the UK, discharge takes 9 months to a year to happen.
This is what courts of law are for. You’ll need to hire a lawyer or whatever you call them in UK (I’m in USA).
The idea here is that you got money from the debtor in preference to others. What should happen is that all debtors receive an equal percentage of any remaining available funds.
If your brother has no other assets, that £2000 has to be split with all claimants on a percentage basis. If his debt to you was 1/10 of what he owed to all combined, you’ll get to keep 1/10 of the £2000. This assumes that you can prove, in a legally-satisfactory way, that he owed you that money. There might be some other twists and turns, but that’s about it.
So you need to participate in the hearings, ideally with legal representation, in order to keep from getting screwed. In essence at least part of your brother’s indebtedness has been transferred to you. Through negotiations with the other parties, you can usually work out some sort of repayment plan.
Your only solace is that you might someday be able to guilt your brother into repaying his debt to you, while the other claimants are unlikely to ever see a fraction of what they’re owed.
you need to contact the person who sent you a notice but i beleive it is possible you might have to pay it back because the bankruptcy court could see this as a case of the individual who filed bankruptcy as hiding assets in which case they have the right to get those funds back get a lawyer also for yourself.