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03/03/2020

What does the official receiver check?

03/03/2020

What does the official receiver check?

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When you’re struggling with debts, you might decide to opt for Bankruptcy or a Debt Relief Order (DRO), and as such you will then have to deal with an Official Receiver.

Official receivers are civil servants that work within the Insolvency Service and are officers of the court. They are responsible for administering the initial stages of your bankruptcy or DRO.

This includes notifying your creditors of your agreement, collecting any assets you have to be sold and investigating your financial affairs. This is to ensure that you do not breach the restrictions put on you during the bankruptcy/relief period.

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Does the official receiver check bank accounts?

When you go bankrupt, you will need to be interviewed by the official receiver. This will require you to take several pieces of paperwork, including your bank statements.

So, whilst they cannot physically check your bank account, they will go through all your transactions to get an overview of your finances. It’s then up to them to distribute any profits from your savings to the people you owe money to.

What does the official receiver investigate?

It’s the official receiver’s duty to investigate ‘the conduct and financial affairs of the bankrupt for the period leading up to his/her bankruptcy’. This is done to help them determine the reason that you haven’t been able to keep on top of your debts.

They also investigate your income and expenditure to calculate if you can afford to make any payments towards your debt throughout your bankruptcy. In DRO cases, it’s down to the official receiver to assess your application and decide where it will be granted or not.

Can official receiver take money after discharge?

This will be dependent on whether or not it’s agreed that you will pay income payments.

Sometimes, if you have some disposable income, the official receiver will organise for you to make payments into a ‘income payment agreement/order’ (IPA/O). This will last for three years, even though you are discharged from bankruptcy after 12 months – however, this may be altered if your circumstances or income changes

If you have missed any payments during this time, then the official receiver can chase you for these.

Can the Official Receiver take my inheritance?

This again, will be dependent on a few things; mainly the point at which you receive the inheritance funds.

If this was before you went bankrupt, then it will be counted as an asset and will be taken by the official receiver.

In cases where you receive inheritance after you have been declared bankrupt but you haven’t been discharged yet, you will need to notify the official receiver and they will claim it.

If you get inheritance after you’ve been discharged, then the funds will belong to you. You are not required to notify the official receiver and they cannot take any of the money.

Can the Official Receiver take my pension?

Savings within a pension fund aren’t counted as an asset within bankruptcy, which means that in most cases the official receiver can’t take this from you.

However, in situations where you have made high contributions to your pensions or your scheme is not approved by HMRC then the official receiver can take from this.

In other cases, where you are able to take a lump sum from your pension at the time of your bankruptcy application that’s enough to clear your debts, then it could be refused.

Can Official Receiver take my car?

Unfortunately, your car can be affected in both bankruptcy and a DRO – if you own it outright. In these cases, it will be counted as an asset and will either be claimed by the official receiver or your application will be refused.

If your car is on hire purchase or you got it through a conditional sales agreement, then the official receiver may allow you to keep it. This is because it technically doesn’t belong to you until you’ve paid it up.

However, you may still be forced to give up your car as the DRO or bankruptcy may prevent you from continuing to make the payments.

If you’re looking to keep your car, you do have the option to let someone else buy it (at its proper value) and then allow you to continue to use it. But, if you buy a new car with your own money or money given to you, then it will be taken by the official receiver to be sold towards your debts.

How far back does official receiver go?

The official receiver will look into your financial affairs in the period leading up to bankruptcy. This will usually be any transactions you have made within five years prior to your application that relate to the sale or distribution of assets, but it can differ from case to case depending on your situation.

The reason for this is to check if you have sold anything for less than it’s worth (undervalue). If anything is found, the official receiver will reverse the transaction and bring the item in to form part of your estate.

Lying to the official receiver

It’s considered an offence to lie to the official receiver about anything in your finances when applying for bankruptcy or a DRO.

It’s also important not to hide any assets such as foreign properties or anything you own that’s worth more than £500 as these need to be handed over to be sold towards your debts.

If you’re are caught lying to the official receiver, then you will be punished by way of a hefty fine or up to seven years in prison – and in some cases it’s both. On top of this, you could also be given a Bankruptcy Restriction Order (BRO), which means that the restrictions you were already under could be extended for up to 15 years.

What punishment you receive will depend on how bad the offence you commit is, tey tend to be more severe if the offence is more serious.

If you’re struggling with debts and money worries, we can help. Our experts are on and to offer you free and confidential advice so that you can work through your debts in a way that suits you. Contact us today on 0808 2234 102 or click the button below to be connected.