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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Just on the last matter. My wife went to

Customer Question

Hi just a follow up on the last matter. My wife went to court and the judge set the judgement aside. Thank you. But this thing just keeps dragging on and my wife is once again being held liable for my actions and unfairly so, hopefully the judgement being
set aside proves this. Before I went bankrupt, my business was struggling and I asked my wife to borrow £10000 from her cousin. I personally paid back an initial amount of £700 to them, it was in cash. The balance of £9300 I paid back from my personal account
shortly before I declared myself bankrupt. Now as I have said in my earlier question, there came a time when I asked my wife to open a new business account in her name as I did not have the correct identification on me at the time. Now lawyers acting on behalf
of the Insolvence Service are claiming that my wife is responsible for the loan and that she benefitted by me paying it back directly before I went bankrupt. Further adding that I had no strict liability to pay back the debt. This I dispute, as my wife was
acting under my instructions, as she was to open the business account in her name trading as my business. All dealings regarding the repayment of the debt were between myself and her cousin, and the £700 was paid by me in person, perhaps proving that the loan
was between myself and her cousin ? The £9300 was used instantly to pay VAT. The VAT owed was for my business and in my name. My wife responded to a first demand explaining all of this. Today we have received another letter saying she is still liable. I have
attached a copy of their letter, please advise
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Hello my name is ***** ***** I will help you.
Just to be clear, who received the money for the loan, you or your wife?
Customer: replied 2 years ago.
The monies were paid into an account that was trading in my wife's name/ Ye Old Crown, which was my business.
I'm not sure if you have reference to our previous discussions, it's all linked
Expert:  Ash replied 2 years ago.
Yes I do, but that question was whether or not your wife was liable for your business debts.
Why was the account in your wifes name of it was your business?
Customer: replied 2 years ago.
I had been trading for two years or so in my name and my bank account. I had wanted to change bank accounts to save on charges.
My wife had come with so that I could let her have signing power as I was away a lot. I did not have the correct identification on me as I had sent away for a new passport.This money that was borrowed was for a debt of mine and her cousin knew this as well.
Expert:  Ash replied 2 years ago.
The problem I think you have is this - it was paid to your wife and not you. If it was paid to your wife (and not you) then technically any debt is between the Cousin and your wife. Unless you have anything in writing to say the debt was yours from your Cousin.
This is because it would appear on the face of it as your wife had the money, she is responsible for the payment.
I am sorry if this is not the answer you want and certainly not the one I want to give you but I have a duty to be honest.
Can I clarify anything for you about this today please?
Alex
Customer: replied 2 years ago.
But for the fact that I did not have the correct identification on the day, the account would have been in my name. My wife was working for me and acting under my instructions.
The debt was for VAT outstanding in my name and was payed back straight away.
I know that the account was in her name, but it was still for my business, she had no involvement in my business other than working for me
Customer: replied 2 years ago.
From her point she had no way of ever paying back this money
Expert:  Ash replied 2 years ago.
But it was not in your name,that is the point. Thats the problem. Its her name and not yours.
I am sorry.
Alex
Customer: replied 2 years ago.
I understand that Alex and also understand that you are giving me your best advice, but I think somewhere before when we were dealing with the other issue, you said that I was vicariously liable for my employees actions.Either way you have been most helpful and I am grateful for that
Customer: replied 2 years ago.
And it was just that, she did not want to ask, I made her ask
Expert:  Ash replied 2 years ago.
Yes you would be vicariously liable, but this is a loan.
If I went out and took a loan for you, I would be responsible. This goes beyond what an employee would do - they opened an account in THEIR NAME and took out a loan in THIER NAME.
I am sorry but I can't really see how it can be yours.
Alex
Customer: replied 2 years ago.
Ok thanks again, still trying to absorb it all.
So what now ? My wife is in no position to pay this amount back.
What options does she have ?
Expert:  Ash replied 2 years ago.
She has several choices:
1) Repayment plan
2) Debt management
3) IVA
4) Bankruptcy
Alex
Customer: replied 2 years ago.
I understand the other three options but what is debt management ?
Customer: replied 2 years ago.
She is also self employed, does this change her options ?
Expert:  Ash replied 2 years ago.
Debt Management is where a company handled the debts for her.
http://www.stepchange.org/
Being employed makes no difference.
Alex
Customer: replied 2 years ago.
Thanks again Alex, I will advise her to try offer them a payment plan.
Based on her income and expenditure, it will not be much. If the payment plan is based on this, it will be as little as £100 - £200 per month.
Do they have to accept this or would they proceed with trying to make her bankrupt ?
All of your advice has been most valuable.
Expert:  Ash replied 2 years ago.
They dont have to accept this - they can refuse and make her bankrupt.
But they may be better off accepting it - but its up to them.
Alex
Customer: replied 2 years ago.
I will advise her accordingly. But one last attempt, could it not be argued that she was under the impression that she was not aware that she was taking on a debt that she would be responsible for and that she thought that I would be responsible for this debt ?And if they decide that they are unhappy with an offer to repay this debt based on her income and proceed with bankruptcy, can she defend this in court, based on my arguments above !
Customer: replied 2 years ago.
Sorry that was not meant to be an exclamation, but a question mark
Expert:  Ash replied 2 years ago.
It makes no difference, the bank account is in her name and she took the loan. These are real estate problems
Alex
Customer: replied 2 years ago.
Hi again Alex, have just spoken to my wife and she needs to know, that in the event of her applying for an IVA, would it affect her ability to carry on trading ?
Customer: replied 2 years ago.
This is the only debt she has.
Customer: replied 2 years ago.
My understanding of an IVA is that she would have to pay a company to consolidate her debt and offer an amount to this company that are asking for the £9300.
So again do they have to accept the amount offered ?
Please explain an IVA to me and any negativ impact it could have on my wife's ability to continue trading.Thanks
Mike
Expert:  Ash replied 2 years ago.
Step change do it for free. If she trades as a limited company it has no impact. If she trades as a non limited company any debts can be included in it but it should not affect trading.
Alex
Expert:  Ash replied 2 years ago.
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