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Thursday, 15 December 2011 09:28

Can You Transfer Balances Before Going Bankrupt?

Written by  Jon
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I am very worried as before my husband went bankrupt in November we transferred a balance from a credit card in his name to one in my father's name. This card was used to purchase our car and was entirely used and paid by my husband and not my father. Will the OR see this as fraud even though it was my husband making payments on the card?

Answer:  I am unsure if this would be seen as fraud, but it is preferring a creditor and could be the basis for a restriction order, or the Receiver reversing the transfer.  If the car has a value, then it gets even more complicated as the Receiver could want the car as well.

 

How much are we discussing here?  Was you husband going to try and continue paying this during his bankruptcy?

 

In the end I would think this is going to be an issue in your husband's bankruptcy.  And the fact your father had the balance placed on his account could very well hold him liable for this amount if the Receiver does not claw back the transfer.

 

Regards,

 

Jon

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